Executive Summary
Introduction The Canadian Plastics Sector Council - Conseil canadien sectoriel des plastiques (CPSC) has identified worker retention/turnover and knowledge transfer as issues critical to the sector’s efforts to meet its anticipated skill needs. The ability of employers to address employment growth as well as replacement of turnover and retirements pose increasing human resource challenges. The CPSC has identified a strong demand, within CPSC and other sector councils, for research which consolidates available ‘best practices’ and solutions for dealing with these issues. This report - commissioned by the CPSC and carried out by the Canadian Labour and Business Centre (CLBC) - provides a comprehensive analysis of best practices in worker retention and knowledge transfer strategies. The report has two parts: 1) a review of the literature on best practices in retention and knowledge transfer, and 2) case studies of best practices within Canadian Plastics Manufacturing firms. Together, the documentation of these best practices can provide helpful and practical guides to other firms dealing with similar challenges.

The Importance of Worker Retention and Knowledge Transfer When a business loses employees, it loses skills, experience and “corporate memory”. The magnitude and nature of these losses is a critical management issue, affecting productivity, profitability, and product and service quality. For employees, high turnover can negatively affect employment relationships, morale and workplace safety. The cost of replacing workers can be high, the problems associated with finding and training new employees can be considerable, and the specific workplace-acquired skills and knowledge people walk away with can take years to replace. The problem of turnover can be addressed through a variety of pro-active retention strategies: workplace policies and practices which increase employee commitment and loyalty. Knowledge transfer initiatives on the other hand, ensure that the knowledge and expertise of a company’s employees—its 'corporate memory'—are systematically and effectively shared among employees. They can offset the negative impact of turnover, but can also work pro-actively to reduce turnover by providing learning and skills development opportunities to employees factors known to reduce turnover. Employee retention and knowledge transfer are two elements of a more general concern that might be best termed ‘skills management,’—i.e., everything that has to do with recruiting, maintaining and developing the necessary mix and levels of skill required to achieve organizational and business objectives.

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. etc. and there is evidence to suggest that benefits are at the top of the list of reasons why employees choose to stay with their employer or to join the company in the first place. interviews were conducted with company officials knowledgeable about the firm’s human resource and organizational practices (such as HR managers and VPs. Many companies are responding to the increasingly diverse needs of their employees by introducing a greater element of choice in the range of benefits from which their workers can choose. IPEX). and loyalty. (Case study examples: hyperlink to Baytech. Innotech Precision. Adequate and Flexible Benefits can demonstrate to employees that a company is supportive and fair. For each company profile. reflected the full range of industry products from packaging. skill-based pay and various types of bonus plans. suggestions.The Case Study Process The companies that participated in the studies were drawn from five provinces. CEOs. They include such things as employee of the month awards.
Best Practices in Retention and Knowledge Transfer 1. IPEX). Where possible. financial and non-financial. interviews were held with workers or in unionized workplaces. electrical components. Canadian General Tower. However. 4. IPEX). (Case study examples: hyperlink to Baytech. Competitive and Fair Compensation is a fundamental starting point in most strategies to attract and retain employees. union representatives. Innotech Precision. incentives given to individual employees. Canadian General Tower. Innovative compensation systems include gain sharing. are rewarded or recognized. 2. groups of employees or to an entire staff. (Case study examples: hyperlink to Baytech. Innotech Precision. as it creates responsiveness to the specific needs and circumstances of individual employees. teamwork. Pay systems may also affect knowledge sharing and transfer if sharing. Data were gathered through telephone interviews and a review of relevant documents. 3. there is general agreement that compensation levels do not single-handedly guarantee employee retention. building and construction. career progression. Common best practices include the use of industry surveys to benchmark and position wage and salary structures to be fair and competitive. company presidents. furnishings. Innovative Compensation Systems and practices can have a positive impact on employee retention by motivating membership-oriented behaviour (commitment). and owners). which was to explore the form which retention and knowledge transfer initiatives took in vastly different types of workplaces. Recognition and Rewards include a diverse range of formal and informal. and included both unionized and non-unionized workplaces. Flexibility in benefits packages can enhance retention. in order to provide an employee/union perspective on the retention and knowledge transfer measures and their impacts on employee satisfaction. varied in size from 26 to 1900 employees. automotive and transportation. Canadian General Tower. This deliberate variety reflected an objective of the study.

the quality of interpersonal relations may contribute significantly to retention in its own right. Good initial orientation to the newly-hired employee can not only help to effectively integrate that person into the workplace but can also help to make the new person feel welcome and provide him or her information about how to cope with the demands of the workplace. Canadian General Tower. Innotech Precision. Recruitment & Orientation practices can be of crucial importance to keeping workers over the longer term. do more than merely work together: they often share similar interests and have a very strong inter-personal rapport. and any possible problems that may arise. clothing. IPEX). Combined with effective communication about how an employee’s efforts at developing skills will lead him or her to more challenging and meaningful positions within the company. Recognition and rewards can contribute to a workplace culture of respect and appreciation for employees and work well done. Canadian General Tower. (Case study examples: hyperlink to Baytech. ergonomics. prizes. etc. etc. health practices (supporting healthy lifestyles. Innotech Precision. safety. etc. (Case study examples: hyperlink to Baytech. including those directed at the physical work environment (cleanliness. but contribute to business performance objectives including employee retention.). diet. IPEX). IPEX). 5. 6. IPEX). Professional Development. (Case study examples: hyperlink to Baytech. Many have put in place effective internal promotion programs that allow even their unskilled and semiskilled workforce to move towards positions of greater responsibility and remuneration within the company. Canadian General Tower. and social environment and personal resources (organizational culture. fitness. Training constitutes a visible investment that the company makes in the worker. Healthy Workplace or Wellness Initiatives take on a variety of forms. and greater competencies and confidence. training encourages workers to make longer term commitments to their workplace: it permits them to see a future with the company. and thereby reinforce employee commitment to the firm. Recruitment practices that emphasize not only formal qualifications (jobrelevant technical ability) but also more general types of qualifications and dispositions on the part of the recruit can be part of an effective retention strategy. Innotech Precision.sponsored sports teams and social events. All of the companies we interviewed were very active in the area of skills training and professional development. and these in turn help to bind them together as a cohesive whole. Our own casebased study revealed that employees in some workplaces.). Employee retention is enhanced by ensuring a good “fit” between a company’s workplace culture—its way of doing business and the qualities that it espouses as valuable—and the interests. particularly the smaller ones. employee assistance programs. and motivations of the individuals that exist within it. Training often leads to work that is more intrinsically rewarding. a sense of control over one’s work. (Case study examples: hyperlink to Baytech. Innotech Precision. character. Indeed.
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.). Canadian General Tower. and so on. 7. and Career Planning are effective ways to enhance employee retention. Healthy workplace initiatives not only improve the health and well-being of individual employees. providing him or her with new skills. Training.

(Case study examples: hyperlink to Baytech. Innotech Precision. Job Design & Work Teams can enhance the intrinsic rewards of the job. making work more fulfilling. many of these practices would be impossible to implement in any effective way. and flexible working hours allow people to strike a more meaningful and potentially less stressful balance between obligations at the workplace and obligations at home. and maintain open-door communication policies. coaching and mentoring. Innotech Precision. Several companies keep their employees regularly up to date on the company’s financial performance. counseling and referral. and personal discussions. (Case study examples: hyperlink to Baytech. phased in retirement. Most. formal postings and newsletters.’ and job rotation can not only improve retention but have also been shown to improve a number of other important indicators such as productivity. IPEX). most importantly. Canadian General Tower.8. Practices such as dependent care leave. phased-in retirements. interesting. Practices such as autonomous or semi-autonomous work teams. Mentoring and coaching. Innotech Precision. (Case study examples: hyperlink to Baytech. Innotech Precision. Policies that prove to be effective in helping employees to manage work-life balance in a shift work setting include (i) limiting split shifts. 10. Knowledge Transfer – cross-training. 9. (ii) providing advanced notice of shift changes. and cross-training and job rotation. (iii) permitting employees to trade shifts amongst themselves and. Open. knowledge transfer practices seek to retain skills. The case studies we conducted revealed considerable efforts to communicate with employees. 11. eldercare programs. ‘self-scheduling. if not all. 12. Flexibility and responsiveness on the part of employers can go a long way in helping employees to resolve such conflicts and be more productive at work. Without communications. through a variety of vehicles including employee surveys. two-way communications are vital to good employee retention. through both formal and informal exercises in information sharing and the building of collective knowledge. Firms that operate on the basis of shift work may have employees who find it particularly difficult to balance family and work obligations. challenging. consulting with employees about their work-life balance needs while planning shifts. Canadian General Tower. and stimulating. Performance Appraisal practices that provide good feedback to employees and give them a view of their longer-term progress within the company ― particularly in terms of training and career development opportunities ― are important ways of enhancing employee commitment. IPEX). IPEX). Canadian General Tower. and should be considered as the basic building blocks of any effective retention practice. regularly scheduled committee meetings. responsive. Work-Life Balance programs recognize that employees have important family and extraprofessional obligations that compete with their workplace commitments. (Case study examples: hyperlink to Baytech. accidents and injuries and product quality. childcare subsidies. of the retention strategies and practices fundamentally depend on a sound approach to communicating with employees. are types of knowledge transfer that
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. Canadian General Tower. While employee retention practices seek to retain workers. Employee Participation & Communication. IPEX).

benefits. and programs that were appropriate to their own unique environment and circumstances (i. low turnover was not necessarily the result of a formalized “retention strategy. and to permanently document and keep knowledge that is vital to business performance. and communications all varied by firm size.overlap with training. cross-training enhances skill levels. training and career development. There are however. intranets.
Conclusions and Recommendations from the Case Study Research 1. 3. and so on). (ii) as with other types of training. and so on. Innotech Precision. While there is no guaranteed set of practices that will work in all firms. Approaches to compensation levels and systems. and with respect to this particular report. In the cases we studied. there are “best practices” identified within the HR literature and in our case studies that should be considered by firms looking to improve employee retention and knowledge transfer. IPEX). employability and job challenges and. can be effective in offsetting the negative impacts of knowledge loss resulting from the departure of workers. 4. The firms we examined all had a strategic understanding of their workforce skill requirements. Our case studies also suggest that SMEs can be just as successful as large companies at keeping their workers. practices. common principles or fundamentals upon which good retention practices are built. firm size. product sector. Cross training appears to be a widely-used practice among the Canadian plastics firms we examined. 6. our case studies revealed considerable variation in the approaches and initiatives taken by different firms.e. which have evolved over time into effective strategies. groupware—aimed to support knowledge sharing among individuals. stressed the importance of responsive and open communications.
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.” Nor was there a “cookie cutter” approach to employee retention. Our research found many good examples of successful Plastics firms with high levels of retention. many of the firms were using their own knowledge and creativity to develop innovative methods. recognition and rewards. as such. industry segment. (Case study examples: hyperlink to Baytech. when employee turnover is high. All of the low-turnover firms we examined felt it important to be competitive on wages. Outside of these fundamentals. it can be a useful tool in building employee commitment. 7. 5. workforce characteristics and interests. Many of the companies profiled in this report have developed their own innovative approaches internally. 2. it appears two serve two valuable functions: (a) it creates flexibility within the workforce which. Knowledge transfer also includes the use of technology-based tools—databases. skill composition of the workforce. low employee turnover and employee commitment. Canadian General Tower. and worked from the principle of treating people fairly. Instead.

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. A number of companies make considerable efforts to communicate with employees for purposes beyond what is immediately necessary for them to do their jobs. and other incentives are important in attracting people and keeping them happy. how it treats employees. should all should reflect the interests and needs of one’s employees. and listening to. Our case studies suggest that many companies—particularly small companies—have little or no formal communications practices. and how people relate to one another in the workplace. rewards and recognitions. their employees. etc. personal and professional development opportunities. but are nevertheless extremely effective in speaking with. 9. A number of our case studies suggest that while compensation. their decision to stay with the company depends vitally on how well they fit in to the company’s way of doing business. what it expects of them. Our own observations of Canadian plastics companies suggest that recognition and rewards are strongly tied to the ‘culture’ of a particular workplace—they support that culture. 10. and they are consistent with that culture—whether or not that culture is something consciously managed or iterated by the company. type of benefits offered.8. The design or use of various compensation systems.

gaining market share – that also have below average turnover rates. Between November 2003 and March 2004. our analysis of the Plastics Sector shows that there are examples of highly successful plastics firms – profitable. The rate of turnover due to voluntary separations (retirements and resignations) also increased. The authors wish to thank Statistics Canada for their assistance providing further breakdowns on the data by industry subsectors.2% in 20011.6% turnover rate though voluntary separations. More detailed information on the Plastics sector is available only for 1999. The cost of replacing workers is high. the CLBC developed a methodology for selecting Plastics firms with low turnover rates.6% in 1999 to 19. from 11. There is no need to.
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Based on custom tabulations from Statistics Canada’s Workplace and Employee Survey (WES). Within secondary product manufacturing. retain key employees and transfer and manage knowledge and skills.
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. finding skilled employees can be difficult. This report presents those case studies. and investments in training are less secure. However. growing. which includes the sub-sector of plastics manufacturing. Some of the firms profiled in this report have turnover rates so low that management does not stringently track them. The report begins with a brief overview of the Plastics Industry. It shows that both total turnover and turnover due to voluntary separations were somewhat higher in the Plastics Sector than in the secondary product manufacturing sector overall (16. product and service quality.7%.3% total turnover rate and 12. Turnover affects productivity. total annual labour turnover increased from 15. Labour Turnover and Knowledge Transfer Case Studies from the Canadian Plastics Sector I. using the latest technologies. and funded by Human Resource Skills Development.Employee Retention. The project was carried out by the Canadian Labour and Business Centre. along with a list of conclusions and recommendations for firms looking to reduce turnover. Introduction
Turnover is a critical human resource issue in all sectors of the economy. Our goal was to identify. and profitability. a Review of selected literature on retention and turnover.8% to 15. interview and prepare best practice company profiles that could be strategically shared among stakeholders within the Plastics Sector2. managed by the Canadian Plastics Sector Council.

CLBC was able to arrange 15 case study interviews. Our target of 30 firms was clearly overly-optimistic in light of these circumstances. President of CEP is a long-standing CLBC Board Member. and relied heavily on support from the Canadian Plastics Industry Association (CPIA).II. We are pleased however. CPSC Board Members were also invited to put forward the names of companies and contacts who they thought could quite possibly be good examples of low-turnover firms.
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Perrin Beatty. and a list of over 50 plastics sector companies that required further contact. Individual companies were then contacted via telephone and email to solicit participation. company presidents. The information gathered through this initial round of consultations contributed to the development of a conceptual framework for selecting Best Practices. Our intended sample size was 30. Indeed. We also spoke with John Margeson of Industry Canada. President of CME is business co-chair of the Canadian Labour and Business Centre. David Alcock of Humber College Plastics Training Centre. president of the Canadian Labour Congress is CLBC’s labour co-chair. With the list of 50 companies gathered through the initial consultations. Further contacts were made with representatives of the Communications Energy and Paperworkers Union (CEP)4. 2) followup contact in some cases involved multiple calls and emails before we could determine whether a firm would participate.The results of the interviews were written up and added to the background information collected in the preliminary profiles to produce a series of case study profiles. with the quality of the examples we were able to document. CLBC reviewed the respective company websites to prepare individual preliminary profiles based on publicly available information5. the more developed is the website. Relatively short 40-60 minute interviews were conducted with company officials knowledgeable about the firm’s human resource and organizational practices (such as Human Resource Managers and Vice-Presidents. and owners). The conceptual framework appears as Appendix A to this report.
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. Ken Georgetti. Our second step was to vet the conceptual framework back through the CPSC to ensure that CLBC would be choosing the types of firms whose human resource practices and organizational approach would be useful sharing throughout the plastics and wider manufacturing sectors. Given the constraints of the project time frame. and numerous sector council executive directors representing subsectors in manufacturing. Brian Payne. CEOs. This was well below our intended target of 30 for two reasons: 1) many of the referred company contacts were unreachable through first attempt through telephone. we found that the plastics sector firms we contacted were very busy.
How the Research Was Conducted
Consultations were initially held with CPSC (Canadian Plastics Sector Council) Board Members to prepare an analysis of the context in which high turnover rates were occurring. This quasi-survey of Plastics Sector websites revealed clearly that the larger the firm. It should be noted that there was considerable variation in the amount and type of information available on company websites. We also contacted national and regional directors of the Canadian Manufacturers and Exporters3.

made possible in part by improved production technology. Some Canadian companies specialize in the manufacture of pigments. panels and siding. plugs.23% for the economy as a whole. The industry’s compound annual average growth in output has consistently outpaced other manufacturing sectors as well as the economy as a whole. mounts. manufacture of equipment and molds for transforming the resins into finished-products. house wares. powders and liquids). tableware. For example. circuits. and processing resins to manufacture finished plastic products or components. vapor barriers and insulation. 10% Automobile & Transportation Uses – bumpers. containers. biomaterials. upholstery. it is also one of the largest manufacturing sectors in the Canadian economy. pipes. floor-mats. etc. clips. linings.7% increase over 2001. paneling. which outstripped growth for both the manufacturing sector generally and the economy as a whole. etc. bags. seals. tubs and pails. continue the trend for traditional materials such as metal. wall coverings.63% for manufacturing generally and 2. and enhance growth. grills. relays. 10% Miscellaneous – organic coatings. which are refined and processed to form monomers – the building blocks for different types of resins. foam. surgical implants. the period from 2000 to 2002 saw growth of 8. New developments in plastics materials. fittings and conduits. packaging material. cables. Increasing demand for new types of plastic products will ensure continued strong industry growth rates. protect seedlings. crates. etc. breaker boxes. medical supplies. Fibre optics and digital technology have revolutionized
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. terminal blocks. strength. irrigation systems. eaves. covers. window fittings and skylights. electronics. gears. flooring. glass and wood to be replaced by plastics in applications such as packaging. pipes. mattresses. filters. gaskets.
An Industry Profile of the Plastics Sector
The Plastics industry has been one of the fastest growing sectors of the Canadian economy in the post-war era. adhesives. In 2002. decorative laminates. body parts.” of the various ingredients. stretch wrap. wire coating and insulation. which are used to impart special properties such as colour. The basic raw materials for manufacturing plastics are crude oil and natural gas.III. lids and caps. Canadian plastics processors’ estimated shipments exceeded $19 billion – a 8. suitcases. or “compounding.33% for plastics. The industry’s range of products breaks down as follows: • • • • • • 40% Packaging – bottles. coil bobbins. plumbing. sporting goods.
Ongoing developments in applications are helping to ensure a growing market for plastics. The industry can be divided into three major segments: manufacture of plastics resins (which are sold in the form of granules. plastics are now being used in innovative agricultural applications to suppress weeds. switches. auto parts and construction. covers. pipelines. etc. lighting fixtures 5% Electrical Components – sockets. connectors. seating. tiles. fittings. Still others specialize in mixing. toys. insulation and paint 10% Furnishings – appliances. and heat tolerance. which compared to only 2. 25% Building and Construction – glazing. chip carriers. reinforcing fibres and stabilizers. telephone and computer housings. textiles. brackets. hoses. housings.

the storage and transmission of all types of information. And plastics that are stronger than steel can be found in bridge construction.

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IV.

Workforce Characteristics

Accompanying the industry’s steady growth in production has been high employment growth, which has far outpaced overall employment growth. For example, between 1997 and 2002, employment in Plastics and Rubber grew by 22.8%, which was almost twice the rate for the economy as a whole (11.9%). Indeed, over the past ten years, employment in Plastics and Rubber grew by 59.2%, compared to only 20.8% the economy as a whole6. Interestingly, this growth is reflected in all age categories. For example, the number of workers under age 45 increased by 18.6% between 1997 and 2002, while the number of workers near retirement (55+) increased by 74% over the same period. Within each age group, employment growth in the sector exceeded rates found in the economy as a whole. While the Plastics and Rubber workforce does reflect the general trend of an aging workforce, it is relatively “young,” as the proportion of workers aged 55+ increased from 6.1% to only 8.6% between 1997 and 2001. Nevertheless, the percentage of workers near retirement in the plastics sector is still somewhat lower than for the economy as a whole (11.5%). Although the replacement of retiring workers may be less of an issue, the plastics sector appears to have high rates of turnover relative to other industry sectors7. The ability of employers to meet employment demands could be seriously undermined by continuing high levels of turnover, adding enormous human resource costs to the sector. The problem of turnover appears to be particularly acute among SMEs. Labour Force Survey data show that in Plastics and Rubber Products Manufacturing Establishments of less than 100 people, 25% of employees had job tenure of less than 12 months. In larger establishments (500 or more people), only 8% had job tenure of less than one year. In other words, the job tenure statistics may be indicative of higher turnover within smaller establishments.

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Based on the analysis of Labour Force Survey micro-data files. Prism Economics and Analysis, People in Plastics – Update 2001: A Report to the Canadian Plastics Sector Council, April 2001

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V.

Best Practices in Retention: a Review of the Literature

A review of the HR literature suggests that sources on HR retention can be grouped into the following categories: • “How To” articles, books and presentation materials on employee retention. By far the most numerous, these sources tend to be highly prescriptive without delving too deeply into specific details about how to implement retention measures. Case studies of particular companies that primarily relate what a particular establishment has done with little or no reference to more general sources within the HR literature. Works that focus more intensively and exhaustively on specific retention areas. The literature on compensation and benefits systems, for example, is quite considerable. A comparatively small body of academic and business literature in which various research methodologies are used in an attempt to link particular HR initiatives to measurable performance outputs such as productivity, worker turnover, etc.

• • •

Our primary concern in reviewing this literature was to produce a typology of the many types of HR interventions that are associated, in the literature, with potentially good employee retention. This typology was instrumental in the development of a conceptual framework for identifying, selecting and ultimately documenting “best practices” firms for this study. Information about practices was derived primarily from the shorter reference sources of the “how to” variety. However, case studies and more detailed works on particular areas of employee retention proved valuable in introducing noteworthy caveats, nuances and detail into our considerations. Based on our review of the literature, we have developed a list of retention practices that captures the main types of interventions discussed in the HR literature. They are as follows: 1. Compensation and Benefits 2. Recognition and Rewards 3. Training, Professional Development, Career Planning 4. Recruitment & Orientation 5. Healthy Workplace or Wellness Programs 6. Work-Life Balance 7. Job Design & Work Teams 8. Employee Participation & Communication It’s Not Just the Pay … While remuneration and other types of benefits continue to be an important factor in the retention equation, it is important to note that the current HR literature treats them as only one

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Why do people choose to leave or stay? Setting aside our list of retention policies and programs. 1999. at the very least. work-life balance and other topics has mushroomed. see Beauregard and Fitzgerald. 1999. Dibble. Most of these are directly related to creating a satisfactory work environment for employees and thus. for example. 2001). the business literature dealing with employee participation. in turn. provides an avenue for them to contribute ideas. and not always in and of themselves. Over the past 10 or 15 years. Recognition on the part of the employer that employees need to strike a good balance between their lives at work and outside of work. two-way communication.
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• • •
Companies that are inflexible. including channels for open. Effective communications. employee participation in decisions that affect them. the tenure of their employees is likely to be highly sensitive to changes in specific (usually monetary) incentives: small changes in compensation may lead to numerous departures. an understanding of what is happening in the organization and an understanding of the employer’s main business concerns. These features — or ‘motivators’ — include: 8 • A stimulating work environment that makes effective use of people’s skills and knowledge. Beauregard & Fitzgerald. Opportunities for learning and skills development and consequent advancements in job responsibilities. it is clear that there is broad agreement in the HR literature about the general features of any potential HR program that contributes to good retention. 2001. Or. sufficient to ensure strong employee commitment. and allows them to see how their own contribution influence the company’s well-being.potential area for retention. Butteriss. or whose organizational culture is characterized by domination and autocracy are likely to have dissatisfied employees no matter how good the incentives to stay may be (Ashby and Pell. Harris. workplace wellness. These include:9 •
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Lack of control over one’s work
For examples.
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. See. Respect and support from peers and supervisors. 1999. allows them a degree of autonomy on the job. flexible benefit plans. indicating a strong interest in and recognition of how other aspects of working life influence people’s decisions to stay with or leave a company. to good retention. 2000. 2001. Good compensation and adequate. There are however other aspects of the work environment or particular jobs that can act as strong ‘de-motivators’ that can cause people to leave their employment. Dibble. 1996. CPRN.

A ‘culture of commitment’ is more than just the sum of particular HR policies or retention initiatives. a result of the broad characteristics of an industry or the segment of the market in which the company operates. even under difficult circumstances. attentiveness. It is related rather to overall organizational culture. and how employees perceive their own role within the company and the value that the company attaches to their individual contribution. strategy. simply put. responsiveness. Cultures of commitment. vision. it can of course be difficult to say exactly what decisively makes up a particular company’s culture. he writes: • • • • • • View employees as partners. not just particular programs but rather how such programs fall into a company’s overall values. but is rather inherent in the nature of that type of job. Branham (2001) suggests that commitment-oriented corporate cultures depend on a number of objective and subjective elements. in other words. an employee’s desire to remain a member of a particular organization for motives beyond compensation or obligation (Meyer. in part. Commit to long-term strategy and the people needed to carry it out.
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. or can be the result of forces that originate beyond the firm itself. as some of our case studies demonstrate. Nevertheless.
It is important to note that some of these de-motivators can occur at the best of firms. Often.• • • • •
Feeling bored or unchallenged by repetitive tasks Lack of job security Lack of learning opportunities More generous compensation or benefits package offered elsewhere Concerns about the future of the firm. Because workplace culture depends a lot on how individual perceptions and feelings hold together.
Workplace Culture & Commitment There exists a keen interest in the concept of company or workplace ‘culture’ and its connection with an employee’s sense of ‘commitment’ to his or her employer. Recognize the human needs of all employees. Communicate clear corporate mission. Reward system and management styles to support the mission and strategy. That a particular job description involves many repetitive and boring tasks is not necessarily the result of indifference on the part of the employer. That employees are often pulled to other companies or industries by more generous offers is. and openness of communications on the part of management are elements of the business vision that sustain high retention. how it communicates with its employees about those values. Authors in the HR field speak increasingly of the need to ensure retention by nurturing ‘affective commitment. goals. Invest in people as the primary source of competitive advantage. and objectives. there are companies that manage to thrive and keep their workers under these types of constraints. 2003).’ or.

and this is particularly true for companies that are undergoing major changes (Withers.
Does one need a formal retention strategy? In contrast to “culture. not on who gets credit. the literature strongly supports the notion that people stay with their employers if the culture of commitment is strong. Many companies. what it expects of them. and roll out particular programs or interventions with explicit reference to an overall organizing principle. We may also add to this list the importance of building trust around such values. and other incentives are important in attracting people and keeping them happy. particularly companies that are too small to have a department dedicated to HR matters. “The Canadian Tire Way. or even too small to have an executive exclusively devoted to HR questions. Can such companies promote good retention without developing an explicit strategy? The interviews we conducted with some Canadian plastics companies suggest that the answer is “yes. orientation and attitudes (Harris and Brannick. 1999). and (iii) systems that encourage greater participation in decision-making. Indeed. Trust employees enough to delegate. Focus on results. and emphasize that good retention is best assured when companies take a strategic approach to the question. more generally.” the term “strategy” refers to a more formalized and planned system of practices that are linked with an overall vision. it is also clear that people are more likely to stay if the perceived workplace culture—however this is communicated—is a good “fit” with the individual’s own interests. Tolerate “intelligent error” and experimentation. many experts within the HR literature emphasize the importance of such exercises. human resources management (which often includes retention as one objective). however.10 Indeed. and may prove to be too resource-intensive for smaller companies. Paré et al (2000) confirm a strong link between “affective commitment” and turnover intention. particularly as such commitment is built through (i) skills development opportunities.
Similarly.”
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. 2001). Put a premium on employee involvement in new ideas and innovation. engage in elaborate planning exercises in order to develop a cohesive and unitary strategy to deal with employee retention or. particularly larger ones with fully developed HR departments. Yet it is clear that taking a strategic approach to HR management can require considerable resources. Beyond this. a number of our Plastics sector case studies suggest that while compensation. and how people relate to one another in the workplace. their decision to stay with the company depends vitally on how well they fit in to the company’s way of doing business.” Many of these companies have done an excellent job at keeping their employees without
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See for example Felix (2000). personal and professional development opportunities.” not controlling the people. (ii) systems that allow people to recognize their individual contributions. Nevertheless.• • • • •
Focus on “managing the performance contract. a set of values and a mission (although to some extent “culture” and “strategy” are interdependent). how it treats employees.

accidents and grievances) and HR strategies that emphasize employee participation and intrinsic rewards. They often evolve slowly over time. Leckie and Betcherman (1994) have provided evidence that indicates a correlation in firms between “good” workforce outcomes (reduced layoffs. A number of companies have simply developed good corporate and workplace practices over time simply by being attentive to their workers’ needs and conscious of the value of the contribution they have made. Kaiser and Hawk (2001) concluded that technical training was the highest rated retention practice. it should be noted that good retention practices need not be the result of a single. Finally. quit rates. because of their size. strategic exercise. and even without having consciously and explicitly addressed retention as a primary issue. with programs and policies being implemented on an ad hoc basis in response to perceived employee needs or the evolving demands of business practice. Such
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•
•
•
• •
. Consider the conclusions of a number of key studies: • Comparing the incidence of different types of HR management strategies with a number of business performance indicators. 2003). A survey of Canadian IT professionals conducted by Paré et al (2000) demonstrated that IT specialists’ retention patterns are strongly sensitive to HR practices that provide competence development. small companies can benefit from a much closer day-to-day interaction between owners/employers and workers. better business performance was observed among employers that emphasized employee responsibility for reducing costs and accountability for developing improvements (Wagar. job tenure and higher employee satisfaction.000 employers.
What does the evidence say? Can we definitively say that certain types of HR practices or strategies contribute to good retention? The academic and research-intensive part of the HR literature offers a considerable amount of statistical evidence that there exist strong correlations between the implementations of certain types of practices and indicators of good retention such as reduced turnover. 2003). In a survey of 1. and this may help to explain why they are well attuned to their employees’ needs and interests. Indeed. and lower levels of conflict in the workplace (Wagar. The adoption of “high involvement” work practices was strongly associated with better economic performance and employee satisfaction. In a research study of IT professionals. and related to the above. Research has also shown that the presence of practices related to internal career development is often the best predictor of an employee's affective commitment. quit rates.such formal strategies.

These are but a sampling of the sorts of studies that have sought to determine whether ‘good’ employee outcomes could be positively associated with certain types of HR interventions. and they cite a number of other studies that support similar conclusions. there is strong evidence to suggest that retention is associated with certain types of HR practices. nor has it yet been able to encapsulate in a functional way such intangibles as the quality of the company’s workplace culture or “affective commitment. or whether strong performance creates the resources for the implementation of such practices (Leckie and Betcherman. What is one to make of this evidence? Or. that none of the research actually succeeds or fails in making the ‘business case’ for all of the possible combinations of retention practices or strategies that are implemented by actual firms. 1994).plans include advancement plans. ‘trial and error’ have relayed vital information about how well they are keeping their employees. Morrissette and Rosa (2003) find very little correlation between quit rates and the introduction of different ‘bundles’ of alternative work practices in the Canadian manufacturing sector. to some extent. however. there is little evidence that provides a clearly cut business case for all the particular retention practices a company could conceivable choose to implement. At the same time. 2003). as Leckie and Betcherman (1994) point out. there appears to be reliable evidence to the contrary. indicating perhaps that this area of HR research requires more development. internal promotion and accurate career previews at the time of hiring (Meyer et al. perhaps the more familiar question might be asked: Is there a ‘business case’ for the introduction of certain types of policies as a way of reducing employee turnover? Certainly. a good number of these try to look for correlations using particular combinations of practices.’ ‘alternative.’ ‘innovative.” Furthermore. It should be noted that none of these studies covers all of the potential interventions that companies have come up with.’ or ‘high involvement’ workplace and HR practices. and rarely. Furthermore. if ever. In the same sense. explicitly address retention as an area of business concern. It is not uncommon to hear the phrase: “This is just the way we’ve always done it. It seems clear.”
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. One of the important conclusions of this report (discussed below) is that there is no “magic bullet” or set formula for ensuring good employee retention. At the same time. Others simply practice good retention as a matter of long-standing custom. 1994). while others in fact make the point that better performance is best observed when such practices are contained within a particular system or bundle (Leckie and Betcherman. some studies have presented evidence that finds no correlation whatsoever between reduced turnover and the introduction of ‘progressive. Some of the companies whose practices we have documented have instead relied on understanding the retention challenge by focusing on their unique circumstances and. it is still unclear whether successful practices engender high performance.

irrespective of the quality of their contribution to the company. and that retention based on the principle of “compensation-based commitment” is of course sensitive to changes in compensation within the company. Fifteen years ago. While there is general agreement about the importance of competitive compensation for employee retention. even for semi-skilled or unskilled positions. “Organizations that have high levels of compensation. Most of the sources consulted in this study stress the importance of compensation in attracting and keeping good employees. and can therefore build a strong reciprocal commitment on the part of workers.” But to recall our discussion on “cultures of commitment.
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. particularly for workers whose skills and responsibilities are unique or indispensable to the organization. or even generous compensation will not single-handedly guarantee that a company will be able to keep its most valuable employees. or for those workers in whom the company has invested considerable resources in recruiting or training. Employers that base their retention on compensation-based commitment will always be vulnerable to the possibility that their competitors will be able to offer better wages and thus lure away their employees. competitive compensation is also likely to affect both desirable and undesirable turnover: it will help to retain workers. to the extent that it contributes to retention.” meaning that it is a necessary but insufficient factor in employee retention. Smith (2001) argues that “money gets employees in the door. he argued. Compensation and Benefits A. maintained that the key issue in retention is the amount of total compensation relative to levels offered by other organizations.” Ashby and Pell classify money as a “satisfier. but it doesn’t keep them there.Factors Affecting Retention: Observations from the Literature
1. Similarly. These distinctions are very general in nature and do not necessarily provide a clear rule of application to actual companies. there is also a growing consensus that competitive. Conversely. Compensation Levels The HR literature that covers compensation is quite likely the largest part of the literature that applies to employee retention.11 In addition. high wage workplaces may create a “culture of excellence. some commentators hold that competitive compensation packages can signal strong commitment on the part of the company. it is not uncommon for companies in the Canadian plastics sector to hire workers in this segment of the workforce on a contract basis as the need arises from seasonal business cycles.” he wrote.” it is worth remembering that building “affective commitment” (Meyer et al. authors like Lawler (1990) argue that low wage strategies may be appropriate if work is simple and repetitive and requires little training. However. while Harris and Brannick (1999) agree that money is
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However. 2003) involves much more than paying well. Companies in highly competitive local labour markets may well find that they need to pay highly competitive rates — against some industry or geographic benchmark — in each of their job classifications. experts such as Lawler (1990). “have lower turnover rates and larger numbers of individuals applying to work for them.” Furthermore.

particularly since its various forms are closely tailored to very specific company objectives. For example.’ i. benefits.e. many companies have done a very good job of retaining their employees without any pay-based retention incentives (Pfeffer.
Finally. and there is a great deal of interdependence between compensation and these other practices. specific forms of compensation that are paid for workers or groups of workers who attain certain objectives vital to a company’s business strategy. teamwork. Harris and Brannick. In fact. salaries. — and what is commonly referred to as ‘performance-based compensation. Successful retention under such circumstances seems to depend on a wide number of factors. 1990). companies that successfully incorporate compensation and benefits into their retention efforts have a clear understanding of their business objectives and use compensation as a tool for influencing organizational and employee behaviour (Lawler. etc. suggestions. one should not discount the possibility that certain companies get along very well without offering high levels of compensation for reasons that are not of their own doing. are rewarded or recognized. Whatever their circumstances. is that companies that wish to develop a successful retention plan that includes compensation and benefits must always understand their own unique characteristics and circumstances. Workers in large urban centres where industrial establishments are concentrated may be more likely to move to the competitor down the street even for very modest wage differentials. the existence of other HR practices is also a key to retention.. 1999).
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. it is important to distinguish between what might be called normal or standard compensation — wages. And. including employee retention (Butteriss. Recognize and reinforce important contributions so that employees feel valued. 1999. pay systems and practices can have a major impact on employee retention by motivating membership-oriented behaviour (commitment). etc. Performance-based compensation — or ‘pay for performance’ — is becoming an increasingly popular form of compensation. According to Branham (2001) compensation can also drive commitment-oriented behaviour by: • • • • Sending employees a strong message about what results are valued. 1999). Provide a sense of “emotional ownership” and increased commitment that comes from giving employees “a piece of the action.not the primary motivator for employees. The message. Clearly.” Maintain or cut fixed payroll costs and allocate variable pay to the employees they most want to attract and keep. Some of the companies profiled in this report have done very well by pegging compensation levels against ‘middle of the road’ wage benchmarks rather than trying to out-pay their competitors. Pay systems may also affect knowledge sharing and transfer if sharing. here again. Companies situated in more isolated areas know that their workers are less likely to move for small increments in compensation.

Tompkins and Beech. In the interest of facilitating a better work-life balance. Thus. paid paternity leave. etc. The range of benefits offered by companies is too broad to mention here. and there is evidence to suggest that stable benefits are at the top of the list of reasons why employees choose to stay with their employer or to join the company in the first place (Dibble. disability. Tillman. the growing interest in fitness subsidies or eldercare provisions which are a direct response to changes in personal priorities and demographic changes. tuition reimbursement. the link between benefits and employee commitment is not always strong. they are the subject of considerable concern among employers and workers. Duxbury and Higgins (2001) advise employers to make it easier for employees to transfer from full-time to part-time work and vice versa. as with most other retention practices.B. Most innovation in the area of benefits appears to be focused on the concept of flexibility. vacation. Many companies are responding to the increasingly diverse needs of their employees by introducing a greater element of choice in the range of benefits from which their workers can choose. for example. employee assistance programs (EAPs). However. particularly since it affords greater responsiveness to the specific needs and circumstances of individuals (Smith. retirement/pension. 2001). etc. In addition. Companies with an older workforce demographic might see their retention efforts best served through benefit plans that cover health-related expenses. parental/family leave. Thus. etc (Meyer. care for elderly parents.
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. Employee benefits are constantly evolving as the workforce itself evolves. The importance of a benefit plan to an employee with dependents may assume far greater importance particularly in an environment where benefits costs are increasing rapidly (Tompkins and Beech. Nor are they always sure what motivates the employer to provide these benefits. life insurance. sabbaticals. onsite child care. Examples are numerous and include: earned time off. Companies with a significantly younger demographic may find education subsidies or tuition rebates to be more effective retention drivers. while benefits do not necessarily figure prominently within the literature as a major area of HR innovation. We may note. essential (Tillman. Thus. dental. and as people identify new priorities as being important. 2002). 2003). Benefits Benefits can demonstrate to employees that a company is supportive and fair. Adequate communication with employees is. and readers will already be familiar with the main categories: health. and many such initiatives are focused on allowing employees to strike a better balance between their working and non-working lives. vision. It is important to note that the relative importance of benefits will vary according to the specific needs of each individual. there is also growing concern within industry about the mounting costs of health-related benefits and the magnitude of pension obligations for an aging workforce. 2001). extended leave. 2002. 2003). 1999. the introduction of flexibility in benefits packages can be a key ingredient in ensuring good retention. and a few key observations are worth making with respect to employee retention. Some companies have become more creative in the types of benefits they offer their employees. it is often the case that many employees do not realize the "true value" of the benefits they receive (Meyer. 2001).

2003) Even though Lawler’s typology of compensation systems (1990) is 15 years old at this point. shop floor committees. Financial gains in organizational performance are shared with all employees in a single plant using a predetermined formula measured against a historical benchmark. Profit Sharing: pay is related to the company’s overall financial performance. c. we have presented it below as it retains the essential categories in which we still think about performance-based pay. It is (i) a means of modifying individuals’ behaviour within an establishment in order to better align their activity with particular business objectives. in order to enhance the coordination of teamwork and sharing of knowledge.g. individual merit pay can cause excessive competition for incentives. good performers stay and poor performers leave.. Meyer. a. d.introduce pro-rated benefits for part-time workers. vested about 11% of base salaries into investment funds (Felix. Gain sharing. the key purpose behind performance-based compensation is twofold. Example. and (ii) a way of influencing the development of particular types of organizational culture (e. and does not measure employee-controlled or productivity-related financial performance. C. Gain sharing may also may be effective in smaller firms with less than 500 employees. Gain sharing is usually based on a participative management approach. on average. full-time and qualifying part-time staff receive a 6. and can promote counter-productive behaviour. and vice-versa. hoarding important information rather than sharing it widely within the company and other forms of ‘zero-sum’ behaviour. team-based pay can lead to a stronger team-based culture. for example. skill-based pay or profit-sharing can contribute to a culture of stability and mutual commitment. i.. guarantee a return to full-time status for those who elect to work part-time. Where teamwork is an important part of productive activity. Performance-based Compensation In general. 200).e.. Merit pay allocates pay increases based on individual performance. self-directed work teams. Profit sharing is different from gain sharing in that it does not necessarily involve participative management.75% share of the company's pre-tax profits. Under Canadian Tire’s profit sharing plan.g. It can play a major role in attracting and retaining particular employees. individual merit pay may not work well. b. etc. e. Incentive Pay systems pay pre-determined amounts for each unit produced (piece-rate). Profit sharing has. As with other forms of performance-based compensation. suggestion systems.. and can lead both to good retention and beneficial turnover.
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. and protect employee seniority when shifting from full to part-time work.

team-based pay must be aligned with intentions to promote certain types of behaviour. and can often be expensive for organizations with long employee tenure. i. Income tax obligations on contributions are assumed by the employer (Felix." For example. g. that ESOPs in and of themselves. inhibit behavioural change. 2000). Employee Stock Ownership Plans (ESOPs). Skill-based pay can help organizations meet their skill requirements by directly motivating workers to learn specific skills. team-based pay can reinforce cohesion at the group level and generate strong performance by particular work teams. we would add a number of other well-known forms of compensation. the company pays for the person rather than the job position. Individuals can perform multiple tasks. Bonus Plans. 2003). in which work teams are uniformly compensated for the performance of the team as a whole. Employee ownership arrangements can include stock options plans. the employee is paid according to his or her skills and experience. These include bonuses and other forms of compensation based on job tenure. and capable of targeting particular behaviours that a company might want to change or promote without increasing fixed costs (Meyer. h. Research also indicates. Skillbased pay can also contribute to lower turnover since individuals will be paid more for their knowledge and will be unlikely to find similarly attractive pay in firms using more traditional job-based pay systems. 2003) Example.
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. including filling jobs in the wake of turnover. Retention-based Compensation.e. Meyer (2003) cites a number of different studies that positively link ESOPs and organizational commitment. are not sufficient to increase "affective commitment. These have the advantage of being flexible. however. our list of compensation options would not be complete without some mention of team-based pay. Skill-based Pay. Properly managed. Again. Given the increased interest in employee participation and a growing interest in team-based work. stock purchase plans. The major advantage of this pay system is that it can promote a culture of flexibility. and employee stock ownership plans. f. Under this arrangement. 80% of Canadian Tire employees participate in the stock purchase plan. encourage risk aversion. To this list. (Meyer. Team-based Pay. employees are partly compensated through shares in the company’s stock.e. i. Meyer (2003) notes that a potential disadvantage to this form of compensation is that it can contribute to reduced employee motivation. measures to increase employees' say in how the company is run might be one type of support needed to increase commitment. For publicly traded companies.

team-based pay can also generate conflict and competition among work teams. It would. for example. union involvement at this level appears to be consistent with what much of the literature has to say about the need for open communications. company-sponsored sports teams. company parties. Recognition and Rewards Rotundo (2002) argues that reward systems ought to be a significant sphere of innovation for employers. They are often incorporated into a company’s overall HR policy. In general. A couple of concluding comments about pay-for performance are warranted. There is. it is clear that recognition and rewards—as part of a more comprehensive effort at keeping workers or adopting good workplace practices—can contribute to increased retention. groups of employees or to an entire staff. and our main concern in this section is to present some of the more important words of caution that experts in the HR literature address. however. individual performance bonuses or pay need to be aligned with a structured process for evaluating and managing employee performance. as well as employee participation and involvement. Similarly. prizes. but are just as often awarded “as the need rises” and at the discretion of middle-level managers or team supervisors. suggests the need for more creative approaches to tailoring the right rewards to the right people. However.
2. Nevertheless. The category “Recognition and Rewards” is in some ways a catch-all phrase as it includes a diverse range of formal and informal. Secondly. in the sense that it depends upon—and is to some extent a result of—other HR and business strategies. In addition. recognition plaques). “Rewards and Recognition” covers all of those incentives that are not captured under the other categories of retention measures described in this report. They come in all shapes and sizes: small employee of the month awards (e. Indeed. and we may tentatively make the observation that while they are not generally seen to be
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. incentives given to individual employees. gift certificates. implementation and operation of skillbased pay systems is essential to successfully implementing such systems in unionized environments. Pay-for-performance naturally introduces pay differentials among employees with similar job classifications. clothing.As with individual performance compensation. and this is contrary to the spirit in which unions normally negotiate with management on issues related to compensation. little sense in introducing skill-based compensation if the employer is not actively engaged in providing learning and development opportunities for its members as a part of its normal business practice. she says. and for the purposes of this overview. it should be noted that labour unions are often reticent about embracing pay-forperformance. etc.g. some authors note that team-based pay raises concerns about free-rider problems. The increasing diversity of the workforce. financial and non-financial. be impossible to list all of the various types of recognition and rewards that companies actually give their workers. The first is that the introduction of pay-for-performance is not an isolated intervention.. Brosseau (2000) has cited instances in which pay-for-performance systems have successfully met with union approval. He notes that the involvement of the union in the design.

According to the Canadian Council for Human Resources in the Environment Industry (CCHREI. Gregory Smith (2001). As with many other authors. in other words. In her view. 2000) Everyone who keeps your company productive deserves a fair share of awards. flexible work hours or career opportunities. while at the same time helping to reinforce positive behaviour. “What’s in this for me?” They have robbed their employees of the intrinsic motivation of pride and self-respect ― a dangerous malady that is very difficult to change. rewards must be well justified. who also includes rewards and recognition in his list of highretention practices. showing appreciation “is not related to money. Whether they are part-time. everyone must have a fair chance at getting one. In workplaces where labourmanagement relations are strained or where workers are distrustful of management’s intentions. employees ask. To function properly. Incentive programs should be well thought-out before implementation and used with care. Our own observations of Canadian plastics companies suggest that recognition and rewards are strongly tied to the ‘culture’ of a particular workplace—they support that culture. and they are consistent with that culture—whether or not that culture is something consciously managed or iterated by the company. ‘fit in’ with people’s perception of their employer and their workplace. honours or the other motivational treats that you hand out.” and they emphasize that that principle must be connected to the organization’s core culture. Writing from the employer’s perspective. make sure they are all included.the decisive elements in ensuring good retention. Finally. almost a quarter of respondents said that they left their previous job because they did not feel valued or appreciated. unfair or playing favourites.
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. They write: For some employees incentives designed to motivate may actually demotivate if they seem to be unfair or too difficult to obtain. Rewards must. they often do much to sustain a workplace culture that is aware of the contributions of its members. and that reward must be something that the recipient employee values. Also. Harris and Brannick (1999) offer the general principle that “What get rewarded gets done. also argues that incentives and rewards can turn out to be counter-productive: I know several companies that have relied so heavily on incentives that before any action is taken. Morale will plummet if employees see you as arbitrary. Susan Dibble (1999) does include money in her discussion of financial incentives but she also points out that money is not always an appropriate reward. incentives can sometimes cause unhealthy competition among employees and either force employees to cut corners or sabotage their colleagues. In a survey that she conducted. people will often react with skepticism when rewards are suddenly introduced. casuals or telecommuting.” Beauregard and Fitzgerald (2000) also note the drawbacks with some types of incentives. Too many gimmicks and too much extrinsic motivation will eventually harm their creativity and initiative. It is more personal. interesting new assignments.

rewards. To the extent that operational paradigms such as “The Learning Organization” or the “Knowledge-Based Organization”12 continue to take hold in the contemporary business world. Because training and professional development are so fundamental to the operation of a business. whether or not retention is an important issue to that company.. In any event.. Smith cautions: Used incorrectly. In many instances. The provision of training is a way of developing those skills in the first place. these behaviorist techniques create an effect opposite from that intended. in Punished by Rewards. That training and development are so enthusiastically embraced as key factors to good retention is no doubt due to the fact that well-developed training programs are becoming ever more essential to the ongoing survival of most modern companies. The fact that providing it also turns out to be a benefit that is highly valued by those who receive it makes for a very powerful approach to doing business. We have encountered few examples in which the development of skills at work
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See Drucker (1998) and Garvin (1998). Training. praise. but it is just as much about keeping and managing the skills that a company needs to meet its goals.Smith also cites the work of Alfie Kohn who. comes down hard on incentive and bonus plans. recognition. to be effective. I’ve seen companies wipe out initiative and turn their employees into Pavlov’s dog sitting ready for the next bone thrown their way.
3. Gregory Smith (2001) unambiguously states: Make no mistake about it: all organizations will do a better retention job by spending more resources on training and development.
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. retention reflects a desire to keep one’s valued people. it goes against intuition to suggest that training and development are to be thought of primarily as “retention” tools. training is only likely to become more important.. and this tends to support our reading of the literature which is that recognition and rewards. It’s true that rewards can undermine intrinsic motivation. Smith concludes by stressing that “goal-setting and training” ought to have a greater impact on productivity than rewards and recognition. and bonuses can be manipulative and controlling and amount to little more than a bribe for behavior. must support and be supported by a number of other practices and structures. A business that provides education and training will be more competitive and productive and will win the loyalty of its workforce. Professional Development and Career Planning We treat all activities and employer investments related to learning — which encompasses training and development issues — as perhaps the most important retention factor among the ones mentioned in this report.

was ever consciously introduced as a way of retaining people. Nevertheless, countless studies tend to confirm the fact that a good part of the satisfaction or dissatisfaction of workers is associated with issues related to their professional development. A recent study by Linda Duxbury and Chris Higgins, quoted in Beauregard and Fitzgerald (2000), found that over 40 per cent of small business employees are dissatisfied with the amount of training they receive. The study also found a strong correlation between the dissatisfaction and frustrations surrounding the lack of opportunities to develop skills, and both an employee’s intention to leave as well as the incidence of absenteeism. Similarly, a 1999 Gallup poll named the lack of opportunities to learn and grow as one of the top three reasons for employee dissatisfaction (B.C. Business, 2001), and other studies have offered similar conclusions (BHRC, 2002). Furthermore, the evidence seems to confirm that the link between training and retention is even stronger for more highly skilled workers (Kaiser and Hawk, 2001; Paré et al, 2000). Meyer et al (2003) suggest that employee learning — which encompasses training and development but is also related to socialization within the workplace — contributes to retention by (i) building employee commitment through a show of support, (ii) providing employees with the means to deal with stress related to job demands and change, (iii) serving as an incentive to stay, and (iv) creating a culture of caring. Thus, training and professional development are seen as ways of building employee commitment in that they allow employees to “see a future” where they work, and provide them with the support necessary to face the on-going challenges related to their work. Many employers will of course voice the familiar concern that there is a risk that once trained, workers may be tempted to leave the company for other opportunities. This is no doubt a valid concern amongst many employers, particularly those in large industrial centres in Canada where even semi-skilled workers often operate in a high-demand labour market. As such, companies are only willing to provide training at the minimum level or to provide more extensive training on proprietary equipment and processes. The picture may be somewhat different for more highly-skilled skilled segments of the workforce, where employers appear to be more willing to make greater investments. However, our review of the literature suggests that the increased employability that is developed through employer-sponsored training does not inevitably lead to voluntary departures. In particular, it is doubtful that employees in whom the company invests training resources will simply gravitate to another employer because of modest differences in pay or benefit offered by the other employer. Investing in training can be interpreted as a strong signal that the employer values the employee and wishes to keep that individual with the firm. To the extent that employees perceive this to be the case, and provided that the way the company actually behaves in such a way — by ‘putting its money where its mouth is’ — employees may in fact be more likely to stay. The training incentive is further reinforced if it falls within well-defined and adequately communicated plans for professional development within the company. There is a good fit between training and a number of other retention-related practices, such as career development and planning, skill-based pay, and others. Taken together such practices can usefully complement one another. Training can be a particularly strong retention tool when it is combined with measures designed to allow people to develop and progress within a company

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(Butteriss, 1999; Meyer et al, 2003). We have seen a number of Canadian plastics producers that have put in place effective internal promotion programs that allow even their unskilled and semiskilled workforce to move towards positions of greater responsibility and remuneration within the company. Such programs are inextricably linked with the provision of employer-sponsored training opportunities that directly support personal and professional development. And again, they send a very strong signal to employees that they are important to the company, and that the company is willing to make real investments in keeping them there. In addition, the advantage to training-related incentives is that they can allow companies to focus particularly on employees who demonstrate a strong potential for growth and contribution to the company. Such arrangements end up being to the advantage of both parties. The company is able to secure the skills it needs while at the same gaining some reassurance that its skills development investments are also creating the conditions that will keep those skills in the company. The employee, meanwhile, gains the opportunity to securely move towards better pay and more challenging responsibilities. The reader may be disappointed to see that we have not included an extensive discussion of the types of training and professional development that could be implemented. But it should be kept in mind that training is always unique to the circumstances of each company, and that there is no formula that dictates how much and what kind of training is given. No evidence was found to suggest that specific forms of training or training content were necessarily more conducive to good retention, nor is any type of training necessarily conducive to retention. However, it does seem plausible that training, when combined with well-communicated plans for advancement and ongoing professional development within the company, can help companies to keep their valued employees. 4. Recruitment and Orientation Our review of the HR literature seems to confirm that good retention is about more than what a company does once an employee has been hired and established within an organization. How companies recruit and how they provide orientation in the first days on the job can be of crucial importance to keeping workers over the longer term. Failure to effectively recruit and orient employees may impose significant separation and replacement costs down the road. Smith (2001) attributes 60% of undesirable turnover to bad hiring decisions on the part of the employer. “Bad hiring decisions” may cover a number of considerations, including overly hasty selection processes that fail to ensure that the job candidate really has the adequate skills and qualifications to do the job for which she or he is hired. The research we reviewed also confirms that good employee retention is in part a result of a good “fit” between a company’s workplace culture — its way of doing business and the qualities that it espouses as valuable — and the interests, character, and motivations of the individuals that exist within it. In terms of recruitment, companies should therefore put an emphasis on not only evaluating formal qualifications, job-relevant technical ability, etc., but also more general types of qualifications and dispositions on the part of the recruit. If work in the company involves being part of a highly cohesive team, the company may want to recruit individuals who are

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interested in and capable of working in such an environment. Our own case-based study revealed that employees in some workplaces, particularly the smaller ones, do more than merely work together: they often share similar interests and have a very strong inter-personal rapport, and these in turn help to bind them together as a cohesive whole. Indeed, the quality of interpersonal relations may contribute significantly to retention in its own right. It is equally important for the individual job candidate to have a fair chance at deciding whether the company is a good fit for him or her. Meyer et al (2003) and others have emphasized the importance of providing “realistic job previews” to potential employees. These previews provide potential new hires with more than just a cursory glance at a company’s operations, providing the candidate with enough information to make a decision about whether it is the right workplace for her or him. Harris and Brannick (1999) cite the example of a number of companies that, simply relate the positives and negatives of the job and the organization in an objective, non-evaluative manner and let the candidate decide whether this is an opportunity that she wants to pursue .... In the long run, getting real maximizes the fit between candidate and organization. This is not to downplay the importance of other traditional and non-traditional recruitment methods such as structured interviews, multiple and panel interviews, pre-employment testing, biographical data analysis, simulations and work samples; these are all potentially useful tools that appear in the HR literature (Meyer, 2003). The company must have at its disposal the right tools to enable it to make reasonably accurate evaluations about the type of people it might hire; and there exist a great number of evaluation tools at the employer’s disposal. We simply wish to suggest that allowing both parties to the employment contract to make informed decisions can help to ensure that the right hiring decision is made. Of course, the underlying assumption in the literature is that the cost of recruitment will more than compensate for the costs associated with unwanted turnover; naturally each company must also engage in making such calculations. Many Canadian firms, including some of the firms we have profiled, place great trust in candidates referred to them by members of their own firm, and some even support this process by awarding bonuses to employees who refer a candidate who eventually gets hired by the company (Kaiser and Hawk, 2001). While less formal in nature, employee referrals seem to accomplish both of the objectives just described. The employee who provides the referral is able to provide the candidate with a realistic preview of what it’s like to work in the company based on personal experience and observation. Meanwhile, because they usually know the person they refer reasonably well, and would be hesitant to refer someone whose performance would reflect badly on them, employees can often provide critical information that resumés, job applications and interviews might not reveal. Including one’s employees in helping to evaluate candidates may also be particularly effective with respect to retention in workplaces where team-based work is the norm (Meyer, 2003). Allowing employees to have a say in who they will be working with, and asking for their assistance in evaluating whether that person will be a good fit, may prove helpful in ensuring that the candidate not only has the requisite experience but will also be an effective member of the work team.
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goals. etc. and improve
13 14
See. 2000. for example: Beauregard & Fitzgerald. in fact. clients. The Canadian Labour and Business Centre recently completed a series of in-depth case studies of Canadian companies with strong healthy workplace practices14. and social environment and personal resources (organizational culture. Branham. flexible time. diet. come from a number of the other retention areas described in this report. including interpersonal relationships. customs. 2004).). Our examination of the HR literature tended to support this argument although most authors did not delve into this area in any considerable amount of detail. Workplace health and wellness initiatives were seen to reduce health and safety costs. objectives. a sense of control over one’s work. ergonomics.asp
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. Healthy Workplace and Well-being Programs There is a growing body of evidence that workplace safety.). vacation benefits.clbc. fitness. and history (Foundation for Enterprise Development. companies might be well-advised to turn their attention to factors in the workplace that cause stress in the workplace. 2001. facilitate good labour management relations. work-family balance. its values. job enrichment. relations with supervisors and the availability of other forms of support to perception of how healthy a workplace may be.Finally. health and wellness initiatives can make a fundamental contribution to business performance as well as the improved health and well-being of individual employees. Lowe’s (2003) analysis of data from a survey of some 2. A survey of 16 Canadian CEOs also suggests that business leaders are also becoming increasingly aware of the importance of reducing stress in the workplace (Report on Business. health practices (supporting healthy lifestyles. to the extent that emotional and mental wellness is important to good retention and other indicators of business performance. Kaye & Jordan-Evans. These can be important elements of the socialization process. structure. effective and open communications..500 Canadian workers indicated that many Canadian workers link psycho-social factors.13 Healthy workplace practices take on a variety of forms. e. Potential remedies to poor workplace health may.). providing a good initial orientation to the newly-hired employee can not only help to effectively integrate that person into the workplace but can also help to make the new person feel welcome and provide him or her information about how to cope with the demands of the workplace. Many “healthy workplace” researchers have become increasingly convinced that organizations must also become more attuned to the negative consequences of workplace stress and other psycho-social factors.g. 1999). including those directed at the physical work environment (safety. etc. etc. and found that all of the companies studied sought to measure the impact of their workplace health initiatives on employee health and/or workplace performance. 1994).ca/Research_and_Reports/Case_Studies. Case studies of Healthy Workplace Practices at 12 Canadian companies are available on the CLBC website: http://www. and some companies spend two weeks or more on orientation. 5. 1999. and any possible problems that may arise (Dibble. etc. Thus. during which they provide information about the company. a good work-life balance.

862 employees in the U.S.. The literature we have reviewed suggests that the concept of “work-life balance” is an area of growing interest. the Centre for Families. Work-Life Balance Work-life balance programs cover a variety of interventions. cited in Ashby and Pell (2001). 83% provide time off to care for sick family members 80% provide extended health care benefits
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. revenues. the concept of “work-life balance” recognizes that employees have important family and extraprofessional obligations that compete with their professional commitments. “The fast track has lost much of its luster in recent years. eldercare programs. and employee retention and commitment (Withers. In a survey of 448 employees reported on by Dibble (1999). and organize their careers accordingly.profitability and customer satisfaction. and flexible working hours (Withers. As the list suggests. childcare subsidies. counseling and referral. while a substantial number cited similar reasons for their preference for working at home. many employers have begun to respond to such demands by implementing “work-life balance” initiatives in their workplace. and have done so out of a conviction that providing such benefits can substantially enhance productivity.C. and flextime is the most common arrangement. benefits that may be grouped under this concept therefore allow people to strike a more meaningful and potentially less stressful balance between obligations at the workplace and obligations at home. Business (2001) reports that the amount of salary and number of work hours workers say they are willing to give up to achieve a work/life balance has doubled. 2001). A survey of 1. Whether or not we are in the midst of a cultural shift. 2001). “have become more stressful and less satisfying. B. and include such practices as dependent care leave. “Jobs.” they note.” say Harris and Brannick (1999). They were also viewed as key factors affecting employee recruitment and retention.” They add that high levels of “role overload” and “work to family interference” play a significant role in frustrating recruitment and retention in Canadian companies. and employees generally exhibit less commitment to their employers and higher absence rates from work. Duxbury & Higgins (2001) note that the 1990s saw an intensification of worklife conflicts for many Canadian workers. 6. Work and Well-Being (2000) asked "what are the work-life strategies that make small companies successful in concurrently meeting their business objectives and being a good place for employees to work?" The survey found that: • • • over 80% of companies offer at least one flexible work arrangement for employees. “flexibility in hours” was the third most frequently mentioned reason why employees remain with their current employer. Similarly. reported that most workers wanted a job with flexible hours and that allowed them to take care of personal concerns. In a survey of 300 small businesses in Canada. reflecting a perhaps common perception that we are witnessing a change in culture in the way people are choosing to live their lives.

These include (i) limiting split shifts. By this we mean that workers value their jobs not only when they are well compensated. 2001). ‘self-scheduling. however. Our research on Canadian plastics companies. (ii) providing advanced notice of shift changes. Along this line of thinking. a certain degree of flexibility and responsiveness on the part of employers can go a long way in helping employees to resolve such conflicts and be more productive at work. benefits and other sundry perks. suggested that discretionary time off is a common ad hoc practice. With respect to retention. It is worth noting.
Such arrangements hardly require a detailed explanation. as is building in a measure of flexibility into work arrangements. the literature suggests that “intrinsic” rewards are just as important as material rewards. Again. that some of these practices — particularly those related to ‘time off’ and flexibility for addressing particular needs — need not be a part of some formal benefits program. particularly the smaller ones. interesting. challenging. and stimulating. 7.15 Duxbury and Higgins (2001) argue. and (ii) encouraging employees to use the supports that are readily available and ensure that employees who could make use of such assistance do not feel that their career prospects would be jeopardized by doing so (Duxbury and Higgins. first and foremost.’ and job rotation can not only improve
15
See also Branham (2001). The key to success in this area appears to be. much of the contemporary HR literature reflects a growing interest in practices that enhance such intrinsic rewards. that employers can help to create more supportive work environments by (i) working with employees to identify and implement the types of support they say they need. it is fulfilling. Job Design and Work Teams Our discussion of employee retention thus far suggests that workers stay with a company for reasons other than just good pay. Finally. a good channel of communications and a workplace culture in which employees feel comfortable in asking for time off to deal with pressing family matters. Duxbury and Higgins note a number of policies that prove to be effective in helping employees to manage work-life balance in a shift work setting. (iii) permitting employees to trade shifts amongst themselves and. it should be noted that organizations that function on the basis of shiftwork — manufacturers particularly — may have employees who found it particularly difficult to balance family and work obligations. consulting with employees about their worklife balance needs while planning shifts. most importantly.• •
70% offer time off for "eldercare" 21% offer an EAP. and employers are willing to recognize that granting time off in such a manner ultimately may contribute to greater employee commitment and productivity in the long run. and better inform them about policies that may currently be available to them. and a good part of this interest has focused on business practices that hand over a certain degree of autonomy control and managerial responsibility to the workers themselves. Practices such as autonomous or semi-autonomous work teams. but often because doing the job is in itself a rewarding experience — in other words.
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. in this vein.

and so there also exists a measure of individual internal accountability for results. are to:
• • • • •
Use the joint knowledge and skills of teams to solve problems Encourage cooperation among employees Increase productivity by sharing the work load Motivate teams to achieve the goals of the business.. At the same time. and a degree of autonomy often guide workers’ decisions to stay with their employer. according to CCHREI. meaningful work. in addition. etc. for instance. and there are many other ways to enrich a job. that the benefits of greater autonomy through teamwork go beyond simply retention.” They also report on a survey of 3. Gregory Smith (2001) speaks generally about the retention benefits of “high-involvement” work environments. and the evidence seems to suggest that the intrinsic rewards of a challenging job. accidents and injuries and product quality. autocracy and inflexibility. team-based activity. Harris and Brannick (1999) list “allowing employees freedom to control their work” as a major ‘best practice’ in retention. 1999). while Ashby and Pell (2001) report that “the highest turnover rates are those in which the corporate culture is one of domination. the concept of the autonomous work team is one among a number of practices that contribute to what is called “job enrichment” (Kaye and Jordan-Evans. then work teams must also take on a corresponding measure of responsibility and accountability for the work they do..
Most commentators in the HR field are quick to point out that if the intention behind implementing work teams is to allow a greater degree of flexibility and autonomy in making decisions.g. such as: • Seeking to combine related tasks under one job description so as to create a more unified sense of purpose for the person who carries out that job. emphasizes the importance of allowing more “self-scheduling” and empowering work teams to take on a greater discretion for making key decisions. CCHREI (2000) points out. For example. autonomous work teams are only one form of job enrichment. if autonomous teamwork is valuable to a company. One’s goals in promoting teamwork. which listed the reasons why employees stay in their current job. CCHREI’s guide-book on HR planning. The HR literature seems to confirm the growing enthusiasm for greater autonomy on the part of workers. 2000). CCHREI. then that company may also be well advised to reward and recognize behaviour that generates positive results through autonomous teamwork. including good relations with co-workers.000 American employees. From the point of view of retention. and Increase job satisfaction for employees. which we can define as: ways of organizing work so as to maximize the benefits that employees derive from a job’s intrinsic rewards. e.
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. Each member of the team must also recognize that she or he has specific responsibilities to the other members of the team. quoted in the May 2000 issue of Bottom Line Business’s May 2000. revenue generated. customer survey results. In this sense. teams must be willing to have their efforts measured and evaluated as part of their taking responsibility for success (there are a variety of methods for measurement.retention but have also been shown to improve a number of other important indicators such as productivity.

such practices are seldom embraced solely for the sake of retention but rather because companies perceive that they will also translate into better performance in other areas such as productivity.” according to Harris and Brannick (1999). and may end up not forming a strong commitment to the company. then the entire exercise must clearly begin with two questions: “How can one design this particular job assignment or position in such a way that is more interesting or intrinsically rewarding to the individual who occupies it?” and “What forms of job design or work organization are appropriate to the workplace?” The first question is obvious. We may consider a few illustrative examples: 1. 1999)
In any event. Our case studies of Canadian plastics companies. if promoting good retention is one of the objectives in allowing for greater autonomy on the job. employees may lack the information to form judgments about the company. responsive. Open. but the second question is crucial in translating intentions into sustainable practice. Without communications.•
Rotating people through assignments so as to introduce an element of task-diversity for workers whose normal assignments involve a high degree of repetitiveness (Kaye and Jordan-Evans.” Conversely. And certainly. if not all. two-way communications would appear to be vital to good employee retention. “is to shut them out of the loop of corporate information. they say.
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. interesting and intrinsically rewarding. or it would at least be difficult to implement them with the goal of retaining employees. This is not to downplay the value of re-designing the nature and scope of work with a view to making it more challenging. however. made it absolutely clear that teamwork and other forms of job enrichment are appropriate to certain types of workplaces and not to others. Most. we simply wish to suggest that such practices will be effective and sustainable only if they are integrated into work processes through a careful consideration of how they will impact business activity. Communications and Employee Participation Our discussion of best practices in retention would be far from complete if we did not address the importance of communications. discouraged job-seeking workers. presenting more interesting challenges. Employees are often unaware of exactly how competitive their wages and benefits really are.
8. of the other types of practices described in our review of the HR literature fundamentally depend on a sound approach to communicating with employees. or increasing the diversity of tasks. Rather. A company scarcely distinguishes itself from its competitors by saying that it values ‘teamwork’ or that its employees are ‘empowered’ to make a contribution to the company’s success — these are boiler plate statements that one can easily find in any company prospectus or job advertisement. many of these practices would be difficult to implement. If the employer is not effective at communicating the content of total compensation and benefits. the feeling that one is in the loop reinforces the employee’s connection to the organization. “The fastest way to transform a top-performing staff into a group of disgruntled.

The need for good communications is especially great under pay-for-performance plans if employees are to align their behaviour at work with the intended rewards and outcomes. and other cultural political realities affecting the organization. etc. informed employees are sometimes able to provide solutions to otherwise unresolved problems. This is hardly an exhaustive list. A good system of employee referrals relies upon a workplace environment where management is receptive of suggestions from employees and actively uses open communication channels to secure vital feedback from its workers. resulting in smaller dips in productivity during crises. emerging trends that could affect career possibilities. 5. and the case studies we conducted revealed that a number of companies make considerable efforts to communicate with employees for purposes beyond what is immediately necessary for them to do their jobs. The rationale for good communications is best summed up by Kaye and Jordan-Evans (1999): Conspicuously withholding information can lead to deleterious consequences within the organization. employees tend to feel more included and their trust is reinforced. job rotation. 7. In addition. the organization's and industry's future. many companies have an open-book policy through which employees are kept up to date on the financial performance of the company — good or bad — and are equally keen to apprise employees of changes to business strategy. These types of information help to support employee career development and advancement.
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. Additionally. 3.2. many Canadian manufacturers will keep their employees regularly up to date on the company’s sales performance. Almost all of the efforts we have described in our section on “Recruitment and Orientation” are fundamentally about communicating with prospective and new employees. Thus. depends on effective adherence to forms and standards of communication that are appropriate to and supportive of such ways of organizing work. The HR literature we consulted was emphatic about the need to keep employees “in the loop”. and what they need to do to follow a developmental path. 6. Professional development and career tracking must rest on a solid foundation of communication if employees are to understand their place and their future within the company. self-scheduling. The implementation of autonomous work teams. Information sharing includes: strategic directions. but it does underscore the conclusion that communication is a basic building block of any effective retention practice. The incidence of high stress and its attendant consequences for employee health and wellbeing is in part a function of inter-personal relations in the workplace (which mediate and are mediated by communications) and the availability of open and trusted lines of communication that can help to identify potential health problems before they become too sever. 4. When top leaders share information and expect other managers to share it with employees.

in the end. Let new staff know about expectations regarding job performance. and. and listening to. and indeed encourages. Performance Appraisal and Performance Management Performance appraisals are not uncommon to Canadian organizations. Our case studies suggest that many companies — particularly small companies — are extremely effective in speaking with. Here. and not reducible to particular practices. Increase job satisfaction by letting teams know when a job is well done. what counts as an appraisal or performance management varies a great deal in sophistication and organization. ‘open door’ policies work because workers do not feel apprehensive. implementing practices in the absence of a willingness to communicate — about both positive and negative matters — will not likely contribute to retention. It is in these small companies that we have observed ‘open door’ policies wherein employees are encouraged and able to walk into the president’s or owner’s office to discuss any issue of concern. 2000)
16
Wagar (2003) reports that 64% of Atlantic Canadian organizations conducted regular performance appraisals. However. It is clear. rather than just the other way around. 9. however.Indeed. the more innovative and responsive they have to be in the ways in which they communicate with employees. (CCHREI. we are referring to a process of employee performance evaluation that is closely tied to strategic objectives. Let employees know the difference between acceptable and unacceptable results. As such. innovative communications involve processes that allow employees to communicate with employers. and is potentially married to training and other development opportunities. And as the Kaye and Jordan-Evans quotation suggests. and address problems in the workplace before they become bigger problems. in addition to other important business goals. the lack of leadership will otherwise ensure that communications practices are dropped or not adopted as a part of the company’s culture. their employees. we seek to characterize ‘performance management’ as a type of HR practice that can effectively help an organization to meet its retention objectives. the more companies want to devolve decision-making. Encourage an open and trusting relationship with employees.
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. performance management seeks to:
• • • • •
Develop an objective basis for talking about performance.16 However. people at all levels to speak openly. systems or interventions. fearful or awkward about walking into the boss’s office in the first place: and that in turn depends not on the existence of the open door policy but a basic disposition that allows. Again. Communications is. Generally speaking. a general feature of a company’s culture. promote innovation and creative problem-solving. that provides good feedback to employees and gives them a view of their longer-term progress within the company. Thus. that the success of any communications practices will hinge upon management’s commitment to and belief in the value of good and open communications in the first place. there is no magical formula for effective communication.

Managers may also help to relate performance goals to employee development concerns. performance management can be a successful retention tool. Evaluation. both in terms of procedure (e. 2002). according to Meyer. as part of a human resources policy that values open communication and employee commitment. Managers play an important role in communicating how these goals relate to goals in successively larger units of the company. and that employees trust as being fair. iv. The design of a performance management system. The performance management system must itself be the subject of evaluation. As with other retention practices. unit. involves five essential components: i. According to Meyer et al (2003). When closely aligned with ongoing training and career development. and to setting goals for the next cycle v. it serves as the starting point for division. consistent and well-communicated evaluation criteria) and in terms of the potential benefits arising from such evaluations (e. Most importantly. Formal performance reviews should take place at regularly scheduled intervals and should focus on progress with respect to goal attainment. fairness and openness about the evaluation process are of paramount importance when performance management is tied to specific rewards or advancement. Individual goals are set jointly by managers and employees. performance management aligns the goals of individual members to those of the organization with which they are associated. Set by the top of the organization. promotion. However. training. Managers are instrumental in helping employees to monitor their performance and development. Performance management requires more of a coaching role for the manager. A Strategic Plan. and even termination. and greater participation by the employee. effective performance management requires a system that is fair. It requires clearly articulated and well-communicated strategic goals for the organization as a whole... Training is required to support these expanded roles. and make changes where necessary. iii.g.g.
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. team and individual goal setting. performance appraisals also allow objectives and values to be effectively communicated to employees and can ensure a steady stream of critical feedback about business processes (Rotundo. Feedback and Coaching. training. Indeed. professional development). Monitoring. ii.Performance appraisals inform a number of HR decisions related to compensation. employee perceptions about the performance appraisal system can have an important impact on their decision to stay with a company.

As these priorities become more important. These are reviewed briefly in the following section of this report. and business strategies — not to mention potentially large. no matter how good the incentives to stay may be. It can result from retirements or for other reasons that have little to do with the employer.VI. and to effectively manage it. as a part of knowledge management. the increasing technological sophistication of production processes often requires greater amounts of skill on the part of workers.
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. accumulated financial investments in training. many manufacturers are finding that remaining competitive in the market depends on their ability to employ the knowledge. The concept of knowledge management — the process of gathering value from the intellectual and knowledge-based assets available to a firm — attempts to address the two main concerns described above. If the market for skilled workers is tight or employee turnover is high. business units. respond to customers’ needs. At the same time. ever greater investments in training on the part of employers. to take stock of this knowledge. departments. knowledge. manufacturing processes. ever greater efforts to keep track of ‘who knows what’ within a given organization. And more and more.
Knowledge Management and Knowledge Transfer
Employee turnover is a normal and expected part of business. and potentially vast years of experience working with plant equipment. Thus. solve problems creatively. experience and unique abilities of their workers in order to remain innovative. the problem can be seriously prolonged and compounded. many firms find that they have no choice but to pay very close attention to what their people know. save on costs. and in some cases. and add high value to end products. refers more specifically to processes that achieve the effective sharing of knowledge among individuals. while employee retention practices strive to retain individuals. but in the interim a company can experience skills and knowledge deficits that may have a significantly negative impact on business performance. Knowledge transfer. the loss of employees — whatever the causes — is a loss of their valuable skills. For a company. knowledge transfer policies serve as a retention policy for knowledge and experience (although that is not its only purpose as we shall see). The workers who replace them may eventually reach the level of experience of those who preceded them. or even different branch plants of the same company.

or formally documented certifications (to name but a few examples). outside of it. tacit knowledge is made up of skills and experiences that are not always easy to point out or identify. training reports. whether they are inside an organization. At the heart of knowledge management is the question of how explicit and tacit knowledge can be brought together as a single resource that can contribute to organizational performance. the focus of this section of the report is on the tools that can facilitate the sharing of information among people. On the one hand. Explicit knowledge. Unfortunately. But most importantly. These concepts were first introduced to the business literature by Ikujiro Nonaka (1998). Understanding Knowledge Management and Knowledge Transfer To understand what the literature means by knowledge management and transfer.” It also consists of individual “mental models. according to Nonaka consists of technical skills that are of an informal nature or at least “difficult to formalize. following Nonaka. recorded and made understandable to other people. one must first understand the distinction between tacit and explicit knowledge. In other words. Because tacit knowledge is so hard to identify. Tacit knowledge.A. Knowledge transfer is simply the process by which different types of knowledge are transformed into useable knowledge. Thus. and to what extent it contributes to business performance. either through personal interaction or by recording it. knowledge transfer is about how the sharing of knowledge among individuals can be augmented and improved. . Even the individuals who possess such skills may not be able to identify them or communicate them easily to others. 2001)
1. to return to the heart of our discussion. Knowledge Management: An Overview of the Literature
“Knowledge is tacit—it is held so deeply by the individual that it is hard to express or document. who explains the two concepts in the following manner. psychometric testing. relevant to business operations. that a firm has already made efforts to collect and document (Ednie and Mottola. competency examination results. The reader is referred to his work in this area. and covers all forms of knowledge.17
17
Nonaka’s discussion of knowledge transfer has been greatly simplified here for the sake of brevity. tacit knowledge that has been successfully identified.” (Birkinshaw. Explicit knowledge can also be. then that knowledge becomes . . If ways can be found to transfer that knowledge to others in the firm. explicit knowledge may be contained in performance evaluations. and perspectives” that tend not to be explicitly articulated. then. on the other hand.
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. is objective and quantifiable. 2002). companies often do not realize what knowledge is held by which people. a key source of advantage. many companies only come to these realizations after particular people leave and production problems begin to emerge. but may be important components of job performance. or making transitions between the inside and the outside. beliefs. cited in the bibliography.

Programs and Practices The Importance of Values and Communications Practicing effective knowledge management and transfer requires. that a company have a good sense for what strategic role knowledge has to play in its operations. Knowledge Transfer Policies. etc. recognizing the good knowledge sharing practices of individuals. Birkinshaw (2001). The recognition of good practices is also an effective way for a company to communicate what practices it considers to be important. Some authors in fact caution that there is often a temptation for companies to get caught up in the lure of new knowledge management technologies without having spent enough time considering corporate values. Stantosus and Surmacz (2001). and providing the resources needed to integrate these effectively. See. Thus. creating a workplace culture that recognizes the value of tacit knowledge. communicating openly with employees about why their knowledge is important and valued. that companies communicate effectively with their employees about what is expected of them. for example. and how they are expected to align their professional behaviour accordingly. responding to customers’ needs more effectively. Some companies integrate
18
This list is a composite of ideas appearing in multiple sources. it can also take useful steps to reinforce the importance of knowledge sharing practices by rewarding and recognizing workers who do this well (Cameron. 2001). and why the company is placing so much emphasis on their knowledge. many companies offer financial or non-financial rewards to employees who devise particular solutions to business or operational problems. Manasco (1996). creating a workplace culture that encourages those within the organization to share their knowledge and collaborate. distinguish themselves as trainers or sharers of information. 2003). One of the case studies examined for this project demonstrates that good communications in the area of knowledge management may be something as simple as letting one’s employees know that their employer expects them to share whatever external training they may have been sent on with their colleagues. Whether a company wants to strategically use organizational knowledge for the purposes of innovation. and communications with employees to reinforce the value of knowledge sharing (Stantosus and Surmacz.2. But it does seem to require.
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.18
It is important to emphasize that achieving such goals does not require that companies formally lay out their strategy for managing knowledge. and understanding what business targets or objectives could be supported by making better use of them. Referring to these literature sources one can clearly note the importance of: • • • • • understanding the role of knowledge management objectives relative to broader business goals and strategies. Many if not most of the knowledge management authors consulted in this study emphasize the importance of recognizing the knowledge assets vested in workers as valuable. or preventing knowledge loss through turnover. Cameron (2002). knowledge management objectives. above all. first and foremost. Ednie and Mottola (2002). Bontis (2003).

interact and share ideas (Birkinshaw. and may be particularly important to companies facing the retirement of key staff (Frank. It should be noted that cross-training also has the added benefit of developing an increasingly flexible skilled workforce. the sales department would acquire a better understanding about the product manufactured and the process involved (thereby improving its ability to communicate with customers). Mentoring and coaching are also effective inter-generational knowledge transfer tools. 2002). manufacturing operators are rotated through positions that allow them to acquire competency using different machines and equipment) allows for a more limited form of knowledge sharing. Similarly. and often different departments. but they also are valuable in transferring intangible and tacit knowledge (Frank. a company must be attentive to how people are accustomed to working within that company.
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. To ensure good knowledge sharing. In our example. 2001). Job Rotations Already a familiar training and development practice. 2002). Business environments in which individual teams or departments compete intensively amongst themselves may lead to the hoarding of information and knowledge to gain a competitive edge of other business units. firms must encourage individuals to work together. For example. the individual employee acquires a broader perspective of the company’s operations which can then be shared with colleagues. cross training (where.’ Mentoring and Coaching Mentoring and coaching are already familiar to most firms as a training tool. usually within a particular area of a company (particularly manufacturing. In addition. For knowledge management and transfer to be successful.” as the mentoree will often have the chance to benefit from the mentor’s trial and error experience. allowing the less experienced partner to observe and absorb the actions of the mentor or coach. rotating employees through different positions. for example. Frank also mentions that mentoring and coaching are useful ways for workers to share “lessons learned. for the purposes of this study). They achieve this by pairing experienced workers with less experienced workers over a period of time. a job rotation in which technicians or engineers in the manufacturing area of a company are temporarily posted to positions in sales would allow for a greater dissemination of knowledge between these two departments and allow them to benefit from each other’s knowledge. permits experience and knowledge to be shared among areas of a firm that might not normally collaborate closely with one another. and the manufacturing side would have an opportunity to learn more about customer’s expectations and requirements. Communications must also strive to address workplace cultural factors that might impede effective knowledge management. different units or departments may develop isolated and protected information ‘silos.financial rewards for good knowledge sharing practices into overall performance-based pay systems. Otherwise. and to take measures to address the factors that drive the hoarding of information.

Phased-in retirements can allow for increased lead time in bringing in new recruits. phased-in retirements can be effective knowledge transfer tools.
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. This may be driven in part by the fact that many of the major and well-known studies of knowledge management are about relatively large. Numerous companies currently offer software applications for hosting and administering communities of practice. Usually developed through a computer-based system that allows discussion and the sharing of documents. This in turn allows for a longer period of time to achieve intergenerational transfers of knowledge and experience. It should be noted. and some companies choose to use a part of that person’s remaining time on the job on activities related to coaching. can be effective at sharing experience and allowing individuals to build up one another’s knowledge base. while temporarily retaining the knowledge of a company’s most experienced workers. 2002). communities of practice also allow each member to contribute his or her individual experience in the process of collective problem-solving. 2000). In addition to being a useful retention tool. depending on a company’s particular characteristics and requirements. for example.Phased-in Retirements Phased-in retirement is “any arrangement the enables employees approaching normal retirement age to reduce their work hours and job responsibilities for the purpose of gradually easing into full retirement” (Smolkin. and individual roles and accountabilities within the community may be defined strictly (Hasanali et al. communities of practice bring together people with different skills and from different areas of a company or different project teams (or even different plants in different regions). Documenting Knowledge: The Role of Technology A very large part of the knowledge management literature is devoted to discussions of particular types of technology that support knowledge transfer. mentoring and providing other forms of training. 2001). The worker going through phased-in retirement will see a reduction in work hours and responsibilities. Discussion and the exchange of ideas are usually tightly focused on an issue or problem. that the implementation of knowledge management technologies should never be seen as a substitute for the social interactions that are the foundation of knowledge transfer and sharing (Birkinshaw. companies with considerable technological expertise and large budgets for technological infrastructure. Thus. particularly in larger organizations. To what extent the technologies discussed below can be implemented by smaller firms is a serious question that each company would need to assess according to its own capacities. companies. particularly for companies concerned about waves of workers retiring in a short period of time. however. 2001). and often high tech. practices such as mentoring and coaching are equally effective ways of sharing knowledge. to converge on particular issues or problems to be solved (Ednie and Mottola. Communities of Practice Communities of practice are a form of online teamwork that. but even in doing so.

visual explanations). provide the means of storing recorded knowledge. archiving and making available records that “contain” knowledge that has been made explicit. job orders. an online collaborative environment of sorts in its own right. customized to the purpose. discussions. in their view. there are a great number of providers that specialize in the design and implementation of knowledge-based technologies. but its role is essentially limited to two functions. (usually stored on a linked database). but more generally provides computer-based tools that allow people to collaborate on projects. and the products they sell are diverse and numerous. capabilities. Intranet systems function much like the internet. Companies such as Interquisa Canada (interviewed for this study) use their Intranet for many of these purposes. scheduling. Knowledge Transfer: A Retention Strategy
The sources consulted in this study suggest that most of the literature on knowledge management tends not to provide the reader with immediate steps or solutions that can be quickly and easily implemented. allowing people to communicate with one another (e-mail) and to make documents available through a computer network (an internal web). This can be particularly useful when it is not possible to bring people together to share knowledge face-to-face (consider the example of a company that wants to promote knowledge sharing among employees in plants spread out across a region). Groupware is web-based software for online collaboration that “integrates work by several concurrent users at separate workstations.org. and can contain a wide range of materials. and create a permanent record in the process. It can also be useful for permanently recording the actual exchanges that make up knowledge transfer (e. Most commentators tend to emphasize the highly conceptual and abstract nature of the issue and the fact that knowledge management requires. materials management information. Firstly.. thus allowing other people to identify repositories of knowledge in particular individuals. In the case of Interquisa. debates.
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. We therefore provide here a brief listing of the most common types of tools used. It provides a tangible. the more important it becomes to catalogue it in a central repository where it can be easily retrieved. etc.
(2)
(3)
B. including training documents. a considerable amount of strategic thought about a company’s needs. (1) Databases. Intranets are common to many firms. but also to catalogue retained knowledge. such records also contain information about who entered created the record.”19 Groupware is often the environment used for hosting “communities of practice” (see above). share knowledge. explicit record of knowledge that can be permanently held and used by others.g.Technology does play an important role in knowledge management. client information.wikipedia. technology plays the role of documenting. and its available financial and
19
This definition appears at www. Currently. They are used to contain whatever types of knowledge that are considered worth retaining. The greater the extent of knowledge to be gathered. Its second function is to serve as a written or graphic medium for exchanging and building knowledge in the first place.

many of the companies profiled in this report do not have explicit knowledge management strategies. it became increasingly apparent to us that our efforts throughout this project were really directed to a single overall concept. This has helped us to understand the many practices undertaken by the Canadian plastics companies we studied as being part of a single overall goal. particularly in the area of training. As such. as knowledge management and training share a common root in the broader concept of “skills”: when firms engage in training. Having considered these conclusions. Although knowledge management and knowledge transfer are rarely undertaken with the singular goal of coping with the negative effects of turnover. which we understood to be one of skills management. knowledge management practices can have a strong. the development of skills in the workplace. by effecting inter-generational transfers of skill through mentoring). As Bontis (2003) points out. The overall issue of retention is just as much about retaining the skills people possess as it is about retaining people themselves. however. indeed. and when they engage in knowledge transfer (for example. this does not mean that they do not have potentially positive effects on retention. In practice. practical solutions.
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. effectively achieve knowledge transfer objectives. as much as possible. This is not surprising. the bulk of the literature on knowledge management tends to deal at the level of concepts and general planning guidelines rather than immediate. We have therefore tried. and this was in evidence in a few of the case studies conducted. in other words: the practices put in place by organizations to help them to effectively use the skills available to them. some of them are only familiar with the notion in a general sense. to isolate examples of practical applications. and the valuing of employees’ inputs and contributions. they change the level of skills in individual workers (providing new knowledge through training). positive effect on retention. They are usually premised on good communications.intellectual resources. Our previous discussion of retention showed that such practices are not only important but often crucial to building strong employee commitment. many of their practices. they change the distribution of skills. As was the case with retention.

programs and practices used by each firm in an effort to increase employee retention. CASE STUDIES
The firms profiled in this section are presented in no particular order. We then present the policies.VII. and discuss the extent to which management attributes their turnover performance to their strategic approach. Each profile begins with some background information on the company.
The case studies begin on the next page. and they reflect at least some of the diversity that makes up the plastics sector. gathered mainly from company websites.
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. They come from a variety of product sectors and niche market areas. The profiles then examine the nature and magnitude of employee turnover within the firm.

Baytech understands this first hand. In the last several years however. and many others. Taking advantage of seasonal contract opportunities. set up people. business machines and automotive components. About four years ago.Baytech Plastics
A. telecommunications equipment. Baytech Plastics has experienced considerable success since it was founded in 1953. and has responded well to changing market conditions. Their engineering group consists of process. sales have doubled. for the past two years. Baytech’s sales group consists of technical-sales people. and has a positive impact on margins. custom-molded plastic components for domestic and international markets. Strategic Employment Profile Baytech employs 260 people and manufactures from two facilities in Midland. For this reason. In some cases. Ontario. Ontario. Baytech employs a high ratio of engineering support staff relative to its competition. Located in Midland. Baytech has migrated to more assemblies and high levels of value add. Baytech has also. and supervisory staff complete the salary group. Baytech operates in the midst of the largest plastic producing area of North America. Baytech’s customers include manufacturers of household appliances. and they have completely recovered from the loss. The Company Baytech engineers. manufactures. particularly those in lower wages countries such as China. finishes and assembles high-quality. engineering support is third in importance after quality and delivery. Baytech's industry research shows that for buyers of custom molded plastics. In fact. Baytech’s hourly employees are unionized with the Union of Needletrades. Baytech’s emphasis on skills means employee retention and knowledge transfer are key elements in their business strategy of pursuing higher value-add niche markets. electrical and electronic equipment. In the last few years. It also improves customer retention. such as mechanical engineering technologists from college. Retaining employees and managing skills is critical to Baytech’s developing business model. added 50 employees who work between July and December. On the salary side. as customers find this service extremely cost effective. the quality group. The hourly group consists of moulders and technicians. Baytech ships throughout North America and the world. Baytech went through a major crisis when it lost about 30% of their business due to a customer bankruptcy. This move to value-add niche markets differentiate Baytech from other moulders. tool and program technologists. maintenance and tool room technicians. products are assembled to 90% completion. Industrial and Textile Employees (UNITE). human resources. as a current customer in the
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. since higher value add work is more difficult to transfer to international producers. General office staff.

And in this day and age. We’ve had to and competition. Programs and Initiatives Affecting Employee Retention Compensating Success Baytech’s HR group monitors compensation levels in the area. high quality products and services.
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. Baytech began by identifying the measurables of success. If you have high turnover. Management attributes this turnover performance to a number of factors. They haven’t been successful in maintaining customer service. The company has no need of a formally defined retention policy or program. and is not a problem for the company. the ability to meet unpredictable supply requirements. Considering trends in international trade then it goes to China. health and dental benefits. but has in place a number of practices that keep employee retention high. and Baytech will lose this contract as of the end of this year. their location within a smaller community. It is for this reason that Baytech pays close attention to the kinds of skills it needs within its organization. For Baytech owner/president Anton Mudde. things it believes customers will be less likely to find elsewhere. that’s a must. flexibility. I don’t think we could live with turnover. if it’s just labour happening. delivery and quality. the things were important to the firm and the employees. including practices aimed at employee retention and knowledge transfer. Baytech has also introduced an innovative type of pay-for-performance bonus system it calls “rewards for success”. and the kind of business and human resource practices that help it to effectively manage skill requirements. perhaps less an option than it was essential. the rationale for their particular approach is obvious. you can’t have consistency of product quality and customer service. It just makes sense. including the nature of their work environment.3 percent. The company also has a pension plan. to benchmark and offer competitive and better than average wages. Baytech’s strategic move was recognize that. It added markets reduces the likelihood of that can’t just be labour. Turnover not an issue Baytech’s turnover runs at a rate of around 1. Baytech believes that the move to higher valued We need to increase the skill levels. and in the plastics sector specifically through CPIA surveys.appliance industry has made the strategic decision to produce out of China. and their corporate philosophy of treating employees well. Baytech provides customers with more skills. The development of this reward system is something that was developed internally and has evolved over the past few years. Working with the union. Part of our success has been picking up programs where people/companies haven’t done that.
B.2 to 1.

Baytech doesn’t do as much individual level career communication and planning as they would like to. the company sponsors people for the YMCA fitness programs. delivery. and Baytech pays for their membership. but management does discuss career and training options with individual employees on a target basis. and added rewards for meeting the targets. Baytech recognizes success in other ways as well. Development and Career Planning According to Baytech. Today. profitability. employees can switch shifts or volunteer for a particular shift. Knowledge Transfer Through Job Rotations. On the fitness side. employees are knowledgeable about the requirements for advancement. Baytech uses its EMC affiliation to look at all the issues they have in common with other manufacturers. It has helped many simply feel better. According to CEO Mudde: Our Health and Safety record is not as good as it should be. This employee-directed work practice.000 per employee per year. Healthy Workplace Baytech tries to be “reasonably flexible” on scheduling. share information. As a result of a systematic job task analysis carried out as part of the equity plan. through annual awards banquet with long service awards. low turnover gives them the opportunity and confidence to invest more in training. Employees like the program. The company also benefits from their membership in the Excellence in Manufacturing Consortium (EMC) ― an Ontario based association of manufacturers and exporters whose mission is to have members sharing to optimize learning. Our performance target is no loss time accidents. Baytech invests. Workers are cross-trained
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. Currently. They have a fitness group. We have 2 to 3 loss-time accidents per year (issues of strain). comprising three different levels of expertise. they will generally pay for any training related to the business. they rotate jobs within the cell. on average. In the case of longer term programs. and absenteeism. facilitates the distribution and exchange of knowledge and skill throughout the plant. and to leverage training dollars. and so on. Baytech employees can make somewhere around $1. Baytech would like to improve it Health and Safety record. loss time accidents.A set of 10 measures of success include such things as quality. Training. In fact. in which employees plan and execute tasks under their own direction. In their cellular manufacturing assembly operation. Cross-training and Job Pairing Baytech uses job rotations to keep employees interested and challenged in their work. about $1. Baytech pays for training on the understanding that that the employee will finish and pass the requirements for that particular program. expertise and resources to achieve world class. perfect attendance awards.000 bonus meeting these targets. every two or four hours depending on when the employee groups themselves decide. We’re currently working on some good programs with EMC. Baytech also has its own internal technical training program. They then set targets for these.

Transparency and Participation Baytech openly communicates with employees. They want employees to understand their performance as much as they do. but its human resource practices are always guided by these principles. Baytech’s CFO provides almost real-time reporting of monthly results ― the first day of the next month. According to Mudde. Baytech may not have a formalized employee retention strategy. New employees participate in job-pairing and mentoring through their orientation phase. there are three words that sum up that approach: “fairness. At Baytech. For Anton Mudde. transparency and participation go hand in hand. One recent Kaizen event focused on re-organizing Baytech’s warehouse. communication. As a result. from various disciplines in the organization. “It’s one of the things that keep people interested”. This rapid reporting of monthly results is shared throughout the company. A group of eight employees. Other on-going communications activities include quarterly reviews with all employees. A good example is their use of KAIZEN events. monthly results statements posted on 10 performance measures. and resolving it in a short period of time. on both the salary and hourly side. worked intensely for four and a half days to come up with a plan for logistical improvement of the warehouse. net earnings per employee is one of Baytech’s 10 measures of success ― employees can look at what their own personal earnings look like in comparison to what the company takes home per employee. Baytech’s warehouse was re-laid out and organized. so that every employee knows every month exactly what Baytech’s sales and earnings are. Communications.in different jobs and skills. Baytech wants all employees to know what their sales and profitability figures are. communication and recognition”. Indeed. These events involve a process for looking at a project or problem.
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. Corporate values Baytech’s commitment to communications is at the centre of its approach to employee retention. Although a private company. and monthly union-management committees.

and that’s important”. allowing employees “to know what’s happening. and has held various positions in the union local (Union of Needletrades. Secretary-Treasurer. Ryan’s own experience provides an example of Baytech’s commitment to training and education. which brings value to the workplace. Baytech is also keeping people interested in their work and committed to the company. and overall sees the union playing an important and constructive role. Having been with the company for 16 years. concerns. or solutions to problems. allowing them to use their skills and knowledge at work. Believes that employees are listened to and are encouraged to contribute ideas. know where we’re improving and where we need to improve”. Training opportunities: From this employee’s perspective. trust. “Baytech supported me all the way. Good work environment and safe workplace. It is something that can make employees feel valued. by communicating and listening to employees. Believes Baytech employees are proud of their work and what they do.C. Information about company’s performance and measurables are regularly posted. Feedback from the company. an interview was held with Janice Ryan. she has served on numerous committees. Good communications are critical to tap into the knowledge of employees. you have value. Ryan admits that “we do have our problems once in awhile” but considers this “normal”. “You don’t feel like a number.
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. and they have done this for other employees as well”. Good union-management relations.
An Employee / Union Perspective
To gain the perspective of Baytech employees on the issues of retention and knowledge transfer. whether directly in their jobs or through work on committees or as team members on the floor. A “very important” factor. Ryan acknowledges that few employees leave Baytech because they’re dissatisfied with the workplace. characterized by open communications. and she attributes Baytech’s low turnover and high employee commitment to several factors: • • Good wages and benefits. At the same time. Industrial and Textile Employees). and strive to make it better. she completed her high school diploma and went on to take several courses in college. Kaizen event are good examples of communication and participation at work. Ryan also provides workshop training to other Baytech employees in the areas of Total Quality Management and Workplace Hazardous Materials Information System (WHMIS). and employee involvement through committees. and Union Steward. an hourly shift working employee and press operator at Baytech. Job satisfaction. With the support of Baytech. In describing Baytech’s turnover. including Vice-Present. the provision of training and learning opportunities at work are an essential part of good employee retention practices. she feels that listening to the ideas of employees is a very important part of being innovative. and that it’s necessary to keep up with change to successfully compete in the market place. Ryan knows things are changing rapidly in Baytech’s market. Baytech employees are treated well. and contributing to Baytech’s success. Good communications. producing top quality products. In her view.
•
• • • •
From her experience running workshops on Total Quality Management. For this reason.

some 50–55 people are employed as
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. The company’s technology group based in Cambridge. With few exceptions. The remaining twenty percent of Canadian General-Tower’s business activity is in the production of swimming pool liners. etc. Growth at Canadian General-Tower has been stable over the last 3–4 years. containment materials for industry and new industrial roofing products. of whom 300 are unionized.100 individuals. and is continually developing new designs for the appearance of its products.” a blend of leather and vinyl for automotive seating uses. It is the largest supplier of vinyl seating material for motor vehicles serving customers located throughout the world. such as its “Protein Leather. decking. Ontario. ON) and the American subsidiary (Toledo. allowing the company to meet evolving demands and tastes in the appearance. Consolidated sales for the Canadian manufacturing facility (Cambridge. Eighty percent of the company’s business is in the automotive sector.” developed by its R&D group in Cambridge. The company is a leading manufacturer of coated fabrics for the automotive industry as well as other products such as pool and containment liners. another 400 in the Toledo facility. Ontario. the company’s workforce is full-time. OH) were estimated to be in excess of $300 million for 2003.). and. has been responsible for developing the company’s new products or materials.Canadian General-Tower Limited
A. Ohio based subsidiary Textileather Corporation. The major occupational categories represented at Canadian General-Tower are: operators (skilled positions). Workers at the Cambridge plant are represented by the United Steelworkers. and binder cover-stock for the stationery market. maintenance tradespersons. Innovation also takes place on the design side of the operation. including management. The company’s last major spurt occurred in 1998–99 when it acquired its Toledo. roofing materials. of whom 500 are unionized. materials cutters. inspectors. such as “Protein Leather. At the Cambridge facility. Employment Profile Canadian General-Tower employees some 1. the company invests considerable resources in the design and development of new materials for automotive applications. The Company Canadian General-Tower Limited is a privately held polymer products company based in Cambridge. Innovation vital to success Innovation is a key part of Canadian General-Tower’s ongoing success. and semi-skilled employees (forklift operators. grain and patterns that are applied to such products as automotive vinyl fabric and swimming pool liners. 700 of these at the Cambridge facility. With “constant innovation” as a key business principle.

Turnover includes a few retirements from the company’s workforce (the average age of the workforce is 43–44 years). the hiring of journeypersons in the maintenance trades area can often be more difficult than it is with other occupational groups. internal salary reviews are also conducted in an effort to ensure that there is wage equity among comparable jobs and qualifications within the company. Nevertheless. mechanical. The company notes that it is very common to see several generations of the same family working at the Cambridge plant. Programs & Initiatives Affecting Employee Retention Compensation and Benefits Compensation reviews are regularly undertaken to ensure that the company is offering its employees a competitive wage.
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. but which indeed appears to be quite low compared to industry averages. Employee Turnover Low The company estimates that the employee turnover rate at its Cambridge facility is in the range of 4% to 4. technical/technological area. In addition. Wage or salary increases based on individual merit are closely tied to the company’s goal setting process. Generally speaking. while many of the remaining employees live within neighbouring communities. the company notes that higher rates of turnover would be a significant problem. then.
B. Canadian General-Tower does not feel that it has a turnover problem. a figure that the company itself considers ‘average’ relative to other companies. Seventy percent of the company’s employees actually live in Cambridge. and does engage in a number of activities and programs that potentially affect its employee retention. and turnover is not strongly concentrated in particular occupational groups. For example.5%. and an additional 35 workers specialize in product development and design. Canadian General-Tower sees its own compensation levels as being average within the industry.tradespersons (electricians. The company is able to fill vacancies relatively quickly. However. pipefitters) and another 20–30 work in the highly skilled. Canadian General Tower does have an individual merit increase system in place. However. and phased out its profit sharing plan many years ago. The company is not extensively involved with incentive plans except at the executive level. Canadian General-Tower attributes its low turnover in part to the fact that it is a well-known employer in a relatively small community. external compensation reviews are frequently conducted to ensure that the employer is offering a wage that remains competitive.

determine the training they will need upon promotion. The company provides educational assistance to all employees. The company’s health and safety training is extensive and goes well beyond what is provincially mandated. The company conducts assessments to identify potential successors. Apprenticeship Training. 4. 6.According to the company. and safety and health areas. Where relevant. whether they are hourly or salaried. The company sponsors two apprentices in the maintenance trades area at any given time. It feels strongly that good training programs and ample opportunities for career growth within the company are the key to Canadian General-Tower’s success in keeping its employees. and the company conducts follow-ups every 3–4 months. the amount of time it will take for them to be ready to assume their new responsibilities. Educational Assistance. and the most likely avenues for promotion. 2.
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. Training Plans for Salaried Employees. 5. and also includes a “defined contribution plan” provision. Interested members of the existing staff are selected for assessment at nearby Conestoga College. Programs offered by the company include: 1. Training plans for salaried employees are formalized after performance reviews. Training & Development a Must Canadian General-Tower is extensively involved in the training and professional development of its employees. quality engineering areas.500. to a yearly limit of $1. Cross Training. covering up to 90% of educational or training costs. Health & Safety. Succession Planning. 7. Orientation training is provided to all new employees. Canadian General-Tower’s employee benefits plan was at the leading edge when it was introduced in 1991. new employees are provided with “thorough and comprehensive” training in technical development areas. A formal cross-training program exists in the company’s printing department. Pre-retirement counseling is available to employees over the age of 50. The company also has an Employee Assistance Program. People are given the opportunity to qualify themselves in the operation of a number of different printing machines and equipment. Orientation & New Employees. allowing employees to change their benefits options annually. The plan continues to be comprehensive and flexible. 3. The company’s formal succession planning initiative aims to identify high potential employees among the professional and management group who may be candidates for internal promotion.

operate a small distribution centre in Brantford. Communications Although there is no regular system of newsletters or communication. The company uses this system frequently as a more reliable alternative than placing external advertisements for vacancies. Each position that is left open as a result of the new posting is re-posted into the system with similar provisions for all existing employees who wish to fill the vacancy. 42 hour workweek. the company circulated monthly newsletters and held small group meetings to explain to employees what the company was in the process of doing. The company started to implement the Theory of Constraints management system in March of 2002. as these are the company’s main source of new recruitments. Under this plan. Candidates selected for a posting are provided with the training that is needed to assume their responsibilities. On the whole the company admits it has not gone very far in the area of participative management. Recruitment & Selection For hourly wage earners within the company. Work Teams & Participative Management Canadian General-Tower has had some involvement with self-directed work teams. Canadian General-Tower also strongly encourages employee referrals. and are off from Monday to Friday. employees work 12– hour shifts on Saturdays and Sundays. Employees working under this shift schedule earn the equivalent of a full. This represents an additional potential benefit to the company in terms of reduced training periods and recruitment lead times for such positions. such work arrangements are likely to be more commonplace at Canadian General-Tower with its recent decision to implement the Six Sigma® system. thereby creating a ‘chain’ of postings. An attempt to implement self-directed teams in the plant’s dry laminating facility was abandoned after no significantly positive results could be observed. however. with mixed results. a formal job posting system allows the company to recruit from within its existing workforce. In connection with this initiative. The centre’s employees work in a selfdirected team environment.
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. The company does. and no grievances or turnover have been observed in that location. the company does communicate frequently with employees during periods of major change. Ontario.Shift Scheduling Options Some 80 people work under alternative shift arrangements. The internal job posting system allows hourly wage earners to apply for supervisory positions before the company recruits externally. However.

The Employee/Union Perspective Plant workers and maintenance tradespeople at Canadian General-Tower are represented by Local 862 of the United Steelworkers.
C. People are.’ For example. firstly. The union representative feels that a number of factors have contributed to good retention at Canadian General-Tower. and are subsequently used for individual goal setting for these employees. employees are involved in a lot of ‘educational training. wellorganized manufacturing plant. members of the joint pension committee are actively involved in educating plant employees on retirement planning and investing for their pensions. The current president of the union local. at the initiative of the Local. but reports the relationship has been constructive for the past number of years. parties. In addition. baseball teams and participation in an annual dragon boat racing event. Union Support for Training While the representative still felt that the company had some way to go in establishing a truly comprehensive training program. It was negotiated some 17 years ago. he felt that the plant’s workers were generally happy with the level of training support provided. and is seen by the union as having survived so long because it was perceived as being mutually beneficial to both workers and management. The company also has an employee recreation association that organizes festival nights-out. The company’s alternate shift scheduling policy — referred to as ‘weekend crewing’ — is also highly valued by many of the plant’s workers. Workers also recognize that the wages and benefits are very competitive for the region. Recognition & Awards The company gives non-monetary service awards for long-standing service to the company.The company also develops charters for particular business areas in which improvements are being sought. The charters are communicated to the relevant salaried employees. who has worked at the company for 27 years. These activities are funded by the company. says that relations between workers and management at the company have seen their highs and lows.
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. It should be noted that unionized employees frequently deliver the actual in-house training. very satisfied to be working in a clean. Other Initiatives The company has a 5-day-a-week casual wear policy.

the union’s representative feels that communications between the company and its workers are quite open. and better compensation. Indeed. the 1-year agreement did provide some modest wage increases.
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. the company and the union enjoy very open communications. Some 15 years ago. and a cooperative and open relationship with its labour union. Things were not always this way. but the true strength of the cooperative nature of relations at Canadian General-Tower is the fact that both sides have seen the benefits in having good relations. and that a high level of trust exists between the two parties. and also allows it to go after more business than it could if it didn’t have the necessary flexibility in place. The program has conferred mutual benefits to both the company and its employees. good communications. to the fact that workers at the company were given enough information to help them understand why the company was experiencing the difficulties it was going through. But even in these difficult times.The union has also been very supportive of the ‘pay for knowledge’ cross-training program implemented in the company’s printing department. Canadian General-Tower’s CEO at the time led the way in mending relations and opening the channels of communication with the company’s workers. Conclusion The company does not have an explicitly articulated policy on retention. in turn. This. an extensive training program that provides excellent opportunities and skills development for its workers. Monthly joint meetings require a high degree of openness on the part of the company. this program provides the skills the company needs to ‘upshift’ during its peak business periods. nor does it seek to integrate its many human resource practices into its broader performance goals or strategic vision. and this can be credited to good compensation. it is somewhat skeptical about the possibility of linking the outcomes of these various initiatives to performance goals in a way that is reliable and measurable. relations had hit rock bottom. Today. External training was even provided to both union and company representatives in order to create a more cooperative culture. with many disputes in evidence but little resolution to outstanding problems. the company appears to have an excellent retention record. translates into increased job security for workers. The union credits this. Improved Communications While there is still room for improvement. It shares financial and core business information from time to time with union representatives. Relations have been somewhat more strained recently due to the difficulties faced by the industry over the past 3–4 years. workers have been willing to accept — by a margin of 89% in favour — a less-than-optimal one-year collective agreement (where normally 3-year contracts were the norm). According to the union. in part. and have built up a high level of trust over many years. Of course. Nevertheless. according to the union. and workers are generally well apprised of major changes in operations.

The design department uses a team approach to produce total design solutions to customers or works in cooperation with the customer’s own engineering staff. The company has an impressive growth history. and a maintenance department including industrial mechanics and automation technicians. particularly as they move strategically into the value-added assembly area. A privately held Canadian corporation. Huronia honours their QS 9000 and TS 16949 registrations because they feel it is the right thing to do. a quality department with inspectors.
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. and they are looking for an entry level apprentice. delivery. The company believes that growth prospects continue to look good. the company strives to manufacture high quality plastic components at competitive prices. not just because it’s mandated by customers. employee empowerment and process validation. A highly automated manufacturing division includes production and assembly operators and six full-time highly skilled setters who do the mould changeover for different production runs.Huronia Precision Plastics Inc. is a full service supplier of injection moulded assemblies and components. tier-one automobile customer. Currently Huronia employs three journeymen. two senior apprentices. Huronia was recognized for their achievements in quality. Huronia started out with just two people operating out of a garage.
A.000 components and assemblies each day to customers around the world with only one part per million rejected and a 99.8% on time delivery record.000.
Employment and Skills Profile Huronia employees work in one of several departments. A tooling division includes highly skilled mould makers. which ensure on-going product quality. and has since grown to employ 100 full-time employees operating out of two adjacent facilities in Midland Ontario. one junior apprentice. The Company Huronia Precision Plastics Inc. and to exceed customer expectations through maximum customer servicing. Huronia attributes much of its success to its key Measurables and Objectives and its Quality Operating Systems. each with its own type. Huronia conceives designs and develops high tech automotive products using small tonnage machinery to produce high volume production and assembly for the global market. Huronia received a number one ranking from every one of its customer’s divisions with an overall average of 98% approval on the products produced for them. continuous improvement. customer service and employee quality of work life. Huronia supplies upward of 1. According to their own mission statement. having recently received a supplier of the year award from a multinational. Huronia has its own transportation division. Fifteen years ago. level and “mix” of skill requirements.

If you had turnover there wouldn’t be that same sense of commitment to the employer when it comes to quality and safety. The 5S program is a visual plant management program designed to ensure a clean and well-organised plant. having recently voted to remain non-union after an organizing campaign by the Teamsters. There would be things that would begin to suffer. Quality would suffer. we couldn’t possibly have the same focus on quality and attention to detail. This is an important point. They see every employee having an important role in contributing to a good and safe work environment and the production and delivery of quality parts. They participate in the 5-S program21 to keep a clean and safe work environment. But for Huronia. not just those at the highest skill levels.Huronia’s 100 full-time employees are a younger group. Through its involvement in the Excellence in Manufacturing Consortium (EMC) 20 the company has been able to continue the awareness of health and safety objectives. with most aged 20-39. Jane Robitaille. Although there may be positions within Huronia that can be filled relatively easily. Only about 5 per cent of employees are nearing retirement. which Huronia views as the basis for producing quality products. turnover in these jobs would be also run counter to the company’s objectives. and the average around 35. Turnover in positions which can draw from a large labour pool and require relatively small training investments might be seen by some as “more acceptable” than positions requiring higher formal trades and specialty training. To maintain a strong knowledgeable employee base is crucial to the competitiveness and successfulness of the business. employee retention is critical to Huronia’s business model. Employee Retention is Key Given the diversity and level of skill requirements within the firm. The importance Huronia attaches to employee retention extends to all employees. that’s the wrong way to think about it. Huronia employees are non-unionized.
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. Robitaille gives the example of Huronia’s production and assembly operators: They have company commitment. Low Turnover Turnover among Huronia’s semi-skilled production employees is “about average to below average” compared to local employer survey while turnover among skilled workers is very low
20 21
The EMC is composed of a cross-section of manufacturers with the goal of sharing resources to address the job training needs of its members. the company’s Human Resources Manager describes the impact turnover would likely have on Huronia’s quality and service objectives: If there was high turnover at Huronia. So far this year they’re running at no loss-time accidents.

Most of the time when you get into trouble. Most of the recommendations from EAC are written recommendations that go directly to senior management for discussion and a response is made within 14 days. The SWAT committee determines what top issues should be dealt with. there’s always room for improvement.“well below average”. but does have a number of formal and informal practices that contribute to employee retention. and does not see itself has having a problem with employee retention at any level. The company reports that turnover has remained low for several years. areas where improvements might be made.provide employees with a means of elevating an issue if they are not getting a reasonable response to their request to their department manager. Treating employees well and with respect means building relationships through effective communications.
B. it’s because you haven’t effectively communicated To facilitate effective communications. You can never over-communicate an issue. and makes concrete recommendations to improve the areas that need improving. has a strong emphasis on communications and employee input. According to HR manager Robitaille. and recommendations about how things can be made better. The company has developed its own innovative apprenticeship training program. It is an
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. effective and on-going communications is a cornerstone for employee retention.
•
•
Huronia is looking to further enhance the responsiveness of its communications by formalizing monthly departmental communications . Huronia engages in a number of on-going activities. The most recent employee survey yielded some 26 pages of typed comments about areas with which employees were satisfied. An innovative committee called the SWAT team (The Survey Workplace Action Team) composed of employee representatives from each department holds facilitated monthly meetings to address the top five or six priorities as determined from the survey results. Annual employee surveys are used to gauge employee satisfaction and to set priority areas for improvement. and offers a clean and safe work environment. Huronia’s approach to retention begins with a corporate philosophy of treating employees with respect. Huronia does not have a formal “retention strategy”. including: • An Employee Advisory Committee (EAC) composed of management and employees from all departments. Programs and Initiatives Affecting Employee Retention Communications a Top Priority At Huronia. meets regularly to share information about the business and to discuss a range of issues such as compensation and other workplace policies. Even when communications are good.

Huronia management believes that their employees have a voice in their daily work functions. All studio equipment used to produce the videos was then donated to a local high school. According to Huronia’s HR manager. but that training investments keep employees engaged in their work and committed to the firm. Huronia has developed an injection moulding apprenticeship program which utilizes training videos and best practices standards manuals. all of which were created “in-house” by Huronia staff. will be reimbursed for costs once the course is successfully completed. For this reason. productivity and better working conditions. Accordingly. the company is very active in a number of training and career development initiatives. and delivery. Through these and other informal communications efforts. covering everything from supervisory and leadership training to conflict resolution and communication skills. Toward this end. the company relies heavily on its own internal training programs to develop the skills it requires. even if the training is not a job requirement per se. Huronia also sends employees on training courses. as well as specific training courses in programming or electronics for example. it is unable to rely on the large labour markets of major urban centres for the recruitment of skilled workers. Employees were involved in the writing and production of the training videos and manuals. who is directly involved in the program’s design. Internally Developed Training Programs Given the company’s geographic location. “all of that helps to retain employees”.initiative based on a SWAT committee recommendation for some type of formalized tiered communications.
External Training and the Educational Reimbursement Program In addition to its own internal training programs. The apprenticeship program is the personal initiative of company President Ralph Befort. and commits significant resources to them. Employees who take courses related to their jobs. Training and Development Opportunities Huronia’s management believes that the provision of training and learning opportunities is not only necessary to meet their on-going quality and service objectives. Employees are empowered to recommend policy changes that can lead to improvements in quality.
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. implementation.

Cross-training and Knowledge Transfer Huronia employees also have the opportunity to take cross-training for the purpose of filling in on various back-up positions. Compensation and Benefits Relative to other companies with similar types of positions. but they also are useful for the development and potential recruitment of skilled trades into the company. or when overtime is available.
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. Huronia has Profit Sharing and an Attendance Bonus. and receive a higher rate of pay. production operators may train for what is called a “back up floor position”. For example. dental and vision coverage. This type of cross-training produces a more flexible workforce. The company is careful to note that not all employees are necessarily interested in taking training or pursuing a particular career path. filling in for those on vacation or sick leave. From Huronia’s perspective. Not only do these internship initiatives make an important community contribution by helping local youth learn a trade. the things they might like to do differently. and places employees in a good position to apply for permanent floor positions when they become available. positions they might be interested in. Career planning Huronia has initiated a more formalized system of addressing career development and planning with its recently revised employee performance reviews. Participation in Youth Internship Programs Huronia has been quite involved with various youth internship and training programs. and are happy to continue to do their jobs well. Huronia’s wage rates are at the median. The company offers a comprehensive benefits package which includes health. The company has also sponsored skilled trades workshops for local youth. with additional bonus for those with perfect attendance. Annual performance reviews now involve the setting of goals in two areas: company or department goals and individual goals. In addition. In fact. The review provides an opportunity for employees to discuss where they see themselves in the company. Some employees are satisfied in their current roles. two of Huronia’s more senior current apprentices actually came through a youth internship program called SCYIAP that offer High School students exposure to the trades. but it does provide opportunities for those who want to take them. Huronia has been an active participant in the Ontario Rural Youth Job Strategy. there is nothing wrong with employees making a decision to stay in the job that they are happy with. enhances the skill sets of employees. and is 100 percent paid by employer. and the types of job specific training that might be pursued. All employees receive a base level of the profit sharing. Cross-trained employees may then work the floor position. Huronia’s HR manager describes these initiatives as “a kind of pre-apprenticeship exposure to young people in the community”.

In addition to more traditional occupational health and safety practices. The company also offers an Employee Assistance Program. and holds a variety of social events such as Christmas parties and summer barbeques. safe lifting. teams of employees work on ideas and suggestions to improve work processes. The company has an employee of the year award. and so on. and for the past several years. but that they stay with the firm because they enjoy the work environment. and that includes the people they work with. Recognition and Rewards Under Huronia’s Continuous Improvement Program. they have had a local massage therapist and physiotherapist speak to employees about cholesterol. Huronia employees have a social club that organises golf tournaments. names are entered in a draw at year end to win various prizes. and even “how to improve your golf swing”. has received rebates from Ontario’s Workplace Safety and Insurance Board for their safety initiatives. an annual employee appreciation day. and other events for co-workers and their families. Huronia’s own employee survey indicates high levels of satisfaction with workplace health and safety. For every idea that gets implemented. which uses ongoing communications to strive to continuously improve all aspects of the workplace. this personal commitment has become part of Huronia’s workplace culture.
Corporate Values
Huronia’s HR manager Jane Robitaille feels that the company’s success in retaining employees stems from owner Ralph Befort’s personal commitment to building relationships based on respect.
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. Huronia has undertaken a variety of initiatives to promote workplace wellness.Health and Safety Huronia prides itself on having a clean and safe workplace. bowling. work environment. In the past. In her view. safety. Robitaille acknowledges that people come to work because they need to earn a living.

is essential if the company wishes to survive and thrive. The company relies heavily on skilled mould makers and tradespeople whose qualifications are in very short supply in the Canadian labour market and much sought after. But with only 23 employees. Nevertheless. has worked for more than twenty years on the design and manufacture of custom injection moulds. Innotech strongly supports the apprenticeship and co-op programs for youth development. The company has also added a parts production facility to its operations. Employee Retention at Innotech Precision Inc. when asked how increased turnover might affect the company. including the addition of 6 new staff members at the time its parts production facility was opened.
“It would be nice to have an HR department to work solely on such HR issues like this. The Company Based in Scarborough.
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. Innotech would have a difficult time justifying the expenditures required to have an HR-exclusive function within the company. Employment Profile Innotech is a small company with a total staff of 23 employees. The bulk of the company’s workforce is made up of certified mouldmakers. with only one separation in 2003. and is attentive to ways in which it can help to keep those skills. Employee Turnover The company reports that it has experienced little to no turnover. However. primarily serving the automotive industry niche.” says a representative of the company. The costs of replacing these workers — in terms of recruitment and potentially lost productivity — would be significant. Innotech Precision Inc. Innotech Precision is emphatic and to the point: they simply cannot afford to lose any of their skilled employees who the company has invested heavily in training and recruiting. machine operators.
A.Innotech Precision Inc. and the remainder includes engineers (2). electronic and electrical industries. Most of its employees specially trained and are highly skilled. and now serves a variety of other industries including the medical.” This simple principle. The company’s approach to retention is simple and direct: “Our efforts focus on working to ensure our staff are happy month after month. according to the company.
B. and year after year. the company is acutely aware that its workers have skills in high demand. Ontario. and office staff. Nor does it have an explicitly articulated policy on retention. set-up specialists.

is openly hostile to communication — many employees will simply choose to leave rather than risk confrontation. while the company has little in the way of formal management-employee communications vehicles — aside from a message board where industry news and customer ratings are regularly posted — its small size enables it to ensure that all workers have a chance to communicate their concerns directly with management. With respect to retention. interests or problems they may have. It also provides the company’s management with a vital conduit for feedback that helps it to address emerging problems before they become unmanageable. Again. but have also proven to be important in establishing a comfort level that allows new hires to integrate better within the company. including off-site instruction. it is an open door policy. Training and Development For the most part. and therefore do not require much training. the company believes that in the absence of an environment that promotes open communication — or worse. But where a training need is identified. When asked what can be done by companies in the industry to address high employee turnover rates. Innotech emphasizes first and foremost the need for open communications within all areas and departments of the company. when necessary. their supervisors and management.
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. and the company has noted that new employees with previous experience in other manufacturing companies have been genuinely surprised to see how easy it is to walk into Innotech’s executive offices to address an issue of concern. the company pays for all the costs of training and professional development. The company also sets salary standards based upon employees for have successfully completed their training in recognition of their skills attainment. The company’s open door policy helps to prevent such departures.Participation and Communications The one area in which the company feels it is contributing particularly well to employee retention is communications. their learning tends to be self-directed. especially between workers. If the company has any communications ‘policy’ as such. The company feels that its orientations provide an effective understanding of the company’s business and how its different areas work. Innotech’s workers are a blend of business professionals and tradespersons with many years’ experience in and outside the industry. The company’s management is conscious of the need to create and sustain an environment in which all employees feel comfortable enough to approach the owners and other executives about any concerns. The open door policy does more than simply help to create a culture of openness at Innotech. Orientation Innotech follows ISO standards to provide its new employees with the proper orientation during their first days on the job.

The company is also attentive and responsive to the fact that its performance reviews be perceived as fair and equitable.The company also practices knowledge transfer on an informal basis by communicating the expectation that people who receive training on the outside will come back and share that knowledge within the firm. but is also responsive to employees’ requests to receive performance reviews at other times during the year. In recognition of the high precision work involved and the skills that it requires to do this sort of work. and profitability of the company. Innotech sets its pay above the average benchmark. Performance Management The company conducts employee performance reviews on an annual basis which is a shared review. is banking his overtime into vacation pay so that he is able to get additional paid time to complement his paternity leave when his child is born. In part because the company is small.
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. the company will ask the individual to provide a fuller account of the training content. Benefits and Bonuses The company benchmarks its wages against industry surveys provided by such organizations as the Canadian Plastics Industry Association (CPIA). and Innotech offers a company pension that matches dollar for dollar after 2 years of service. and every year sends at least two people on Health and Safety and CPR Training (it has had no lost time accidents). employees returning from external courses are required to fill out a course evaluation and. Regular benefits are provided after 3 months’ service. Work-life Balance: flexible schedules The company is cognizant of the fact that people are often in search of a better balance between their personal and professional lives. depending on the results. More formally. and responds to these issues on a case by case basis. identify potential learning gaps. and ensures that its compensation is competitive with other companies in the market. The company also pays out bonuses based on both the performance of individuals. completed both by their supervisor and input from the employee. One employee. Innotech is attentive to workers’ needs in this area. Wages. a great deal of emphasis during reviews is placed on how well employees communicate with people in different areas of the company. the company tries to hire one new apprentice each year. and then train other people in the company who might benefit from the acquired knowledge. While it does not have formal practices to address work-life balance issues. for example. In addition.

Knowledge and Skills Management at Interquisa Canada s. turnover has not yet emerged as a significant HR challenge for the company. The first of its kind in Canada. The plant’s activity is exclusively focused on the production of purified terephthalic acid (PTA). and exports much of its PTA production to the US market.e. The plant’s workforce is composed of some 15 engineers and 85 technologists and technicians. Energy and Paperworkers Union of Quebec. More pressing has been the issue of knowledge transfer.c.c.
A.c. Employment Profile The plant employs 140 workers who mostly work on a full-time permanent basis. Interquisa Canada s. It was their responsibility not only to learn these processes but also to work with
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.c.e. Initially. The average age of workers at the company is 35 years. As Interquisa Canada s.e.e.c. and to get production on line. Despite a one-year delay in the construction of the plant. the engineers and production directors with petrochemical expertise hired by the company were sent to Interquisa Canada s. Situated in Montreal.’s main challenge. The remainder is made up of skilled tradespeople (pipefitters. a raw material used in the production of Polyester and other synthetic materials. the plant has an annual capacity of 500 thousand metric tons. etc.’s petrochemical plant began production in September of 2003. as a new entrant in the North American market for PTA production. welders. This posed a number of knowledge management challenges related to initial setup as well as ongoing activities within the plant. the facility is the result of a partnership between the Spanish petrochemical company CEPSA and the Société générale du financement du Québec.c.
B. a dominant player in the North American PTA market.c.e.e. The company is nevertheless aware of the potential future challenge of retaining its highly skilled workforce as the plant’s operation matures. All in all. Interquisa’s is a highly skilled workforce.e.) and inspectors. The Company Interquisa Canada s.’s parent company in Spain to learn how to produce PTA. expects significant growth in demand for its product and has already rapidly reached its production targets for the first year. although it did experience some initial problems in finding enough workers during its initial recruitment. Some 55 production technicians are members of the Communications. was how to learn PTA production quickly.’s Quebec operations are so new. Interquisa Canada s. where its product competes with such major producers as BP/Amoco.Interquisa Canada s.

The company’s key values are confidence. to break down silos between departments.an IT specialist to design computer-based learning tools for the rest of the company’s staff in order to achieve the desired transfer of knowledge. Concentrated in that position are the main functions that ensure that knowledge in the company is acquired. Knowledge transfer and learning principles have strongly guided the company’s day to day activity. If it wants to be innovative. The training coordinator’s personal objective in coming to the company was to build a learning organization. The company’s orientation for new hires includes a detailed explanation of the company’s values and goals.’s development as a learning organization is in part a result of the training coordinator’s vision and her championing the cause of knowledge transfer. In the words of the spokesperson interviewed for this project: The way we are doing things is really the only way to achieve the company’s goals. In addition. This process was supported by the company’s training coordinator who conducted “train the trainer” sessions with 35 of the company’s engineers. but results seem to have supported their knowledge-centred approach. And of course. and the involvement of all of the company’s workers in both maintaining and benefiting from that culture. They appear prominently in the company’s statement of values.c. to have an integrative process. actively promotes these values internally right from a person’s first day on the job. She continues to work on an ongoing basis on the fundamental question of how to build the company’s expertise. flexibility. It is worth noting that the company made a meaningful investment in appointing a full-time permanent training coordinator. Values at Interquisa Canada s. the company also emphasizes the central importance of learning to the organization. and are communicated to employees from the moment they first walk into the plant. best summed up in the training coordinator’s own words: “When you learn in the company.’s Quebec plant requires half of the normal workforce of its parent company’s plant to produce the same amount of PTA. including those who had been sent to Spain to acquire production knowledge.” Addressing such challenges requires a strong commitment on the part of the company to sustain a culture of learning. technologists and team leaders. Interquisa Canada s.c. respect. security and health.e. disseminated and retained in a structured and strategic way. Interquisa Canada s.e.c. engagement.c. to share knowledge.c. Interquisa Canada s. the company’s statements on corporate values and employees’ responsibility for sharing knowledge are posted throughout the company in meeting rooms and common areas. For example.’s Spanish parent company that its knowledge-based learning was the right path to take. this is the only way to work: to learn how to work as a team.e.
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.e. Such activities reflect a strong commitment to learning. and it was on these terms that she was hired.e. and teamwork. The Canadian plant had to invest some effort to convince Interquisa Canada s. it’s your job to teach others what you have learned.

while providing valuable judgments about potential employees who must ultimately be selected by company management. and willingness to share information.c. IFS.’s existing employees actively participate in the hiring process. The software also allows staff members to ‘drop’ into the system all training and descriptive materials related to software applications (e. the centerpiece to Interquisa Canada s. and these are reflective of the company’s core values around building a learning organization through collaboration and team work. Participation in the selection process is a first for many of Interquisa Canada s. Dévonyx.e. new employees have meet with the plant employees with whom they will be working closely and who will be responsible for providing their initial production-related training. The company uses a number of evaluative tools during its recruitment process.’s knowledge strategy is its investment in a number of software applications and electronic infrastructure that are designed to facilitate information and knowledge sharing. During orientation. New candidates are routinely interviewed by many of the technicians. During these 3-hour sessions.c. the training coordinator communicates the company’s key knowledge challenges: • • • How do we collaborate to build each other’s expertise? How do we build our individual expertise? How can we make learning a fundamental aspect of our life at work?
Through these orientations. New hires also have a chance to meet the IT staff members responsible for managing collaborative and document management software for the company. New workers learn that training and learning are fundamental to the company’s activity.e. quality of inter-personal communications. capacity to learn. psychometric and simulation-based testing seek to not only assess experience and qualification. In addition. Networks for Information Sharing On the practical side. but also to take a very close look ability to work effectively in teams.. The company feels that it is an effective a way of building mutual confidence and strong work teams. Thus.g. and the company also provides some training support to help them to take on that role.Orientation & Recruitment Activities The company conducts special orientation courses with its employees to explain the company’s knowledge strategy. The company strongly feels that such intensive orientation sessions help to instill the cultural values and spirit that are vital to its success. An engineering consulting company.e. was hired to build up a visual-based environment that would make it easy for every employee in the company to build information and training materials into the company’s Intranet system.c. tradespeople and other professionals with whom they will most likely be working.
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. Interquisa Canada s. and are not distinct from production.’s employees. the company conveys the message that learning is a part of life at the company.

The company then paid their fees for a 1-year petrochemical technology program at Collège Maisonneuve.e. purchase orders.c.c.c. Interquisa Canada s.c. while technically knowledgeable. Special Training and Recruitment Initiatives Prior to the beginning of production at the new Interquisa Canada s.e. Interquisa Canada s. In such cases. the company also asks that any employee who has been identified as an expert in a certain area (e.g. purchase orders) and is selected to train others in that area. schematic diagrams..e. employees step in to translate all materials related to new systems or equipment into accessible training resources which are then placed in the company-wide computer system. The recruits were successfully integrated into the company. From time to time. For example. That person then acts as the key contact when other employees have questions. Interquisa Canada s. and this is perhaps a result of the constant communication that Interquisa Canada s. Interquisa Canada s. project management) as well as the plant’s principal equipment and machinery. All employees are expected to be proactive in collecting documentation and tailoring it for the purpose of dissemination and they are always encouraged to ask themselves: What information is relevant to what people in the company need? As an additional measure. relies heavily on its employees to transform knowledge into learning. holds with its workers about the importance of building knowledge collectively.c. after which they integrated them into the company and provided additional in-house training. must also enter his or her name into the company’s online resource where the material relevant to his area of expertise resides. The system is used effectively and regularly. In any work shift. an employee who wants to know how the plant’s compressor works will simply navigate to an area in the visual environment and will find all descriptions. often lack the ability to train others in the use of the new equipment. facility.e. notes that external specialists.e. emphasizes that one of the key aspects of this computer-based resource is that it is designed to allow users throughout the company to contribute knowledge and learning. the company also selected 15 EI recipients through a rigorous recruitment program that included job interviews and psychometric testing. suppliers often send specialist to show the plant workers how to use the new technology. all workers know which of the other members on the same shift have expertise in particular aspects of the production process. Thus. The company took advantage of delays in the construction of its facility by extending their college-based training program.materials management.
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. and only one has left the company to date. etc. when new systems and equipment have been purchased.e. related to the functioning of the compressor.c.

is hoping that its knowledge management practices will help it to know exactly what knowledge and skills it stands to lose from potential turnover..e. As the plant’s operations mature and settle into normal production. Generally speaking.e. At the same time. Interquisa Canada s. but clearly the company’s efforts up to this point have concentrated on the plant’s start-up.c.c.e. the company says that it is looking into this area with a view to developing practices and programs. the union is concerned about how the company will manage the proposed job rotation system. they have expressed an interest in this information.e. the company feels that the union has been receptive to the implementation of job rotations. and will likely seek to negotiate a wage bonus in recognition for workers who make a special contribution to learning in the organization. maintenance and laboratory technicians. To further reinforce knowledge sharing and skills development within the company. the challenge of turnover might not be too distant in the future.c.c. is in the process of finishing detailed competency profiles for its production. However. and key skills. However.e. At the same time. the union has been receptive to the company’s activity in the area of learning.Currently Under Development … Because the plant is so new.
•
•
These have yet to come to full maturity. Interquisa Canada s. because it the unique opportunity to participate in a plant start-up. there are strong indications that the company’s approach to knowledge and learning are highly valued aspects of work at Interquisa Canada s. Involvement of the Labour Union The company’s union executive was briefed on the competency profiling exercise. management has yet to put into place the sorts of HR practices that may help to promote knowledge transfer and employee retention over the long term. is currently turning its attention to increasing the use of job rotation. Nevertheless.c. The company believes that many of its engineers and other highly skilled staff were strongly attracted to Interquisa Canada s. This will eventually allow the company to implement process to better inventory and track repositories of knowledge within the company. With the help of its employees. a number of initiatives are currently under development: • While no formal recognition or rewards are currently available to employees who make exceptional contribution to enhancing knowledge sharing.’s job rotation program. the company is cognizant of the fact that it could lose key workers.c.e. Interquisa Canada s. and a number of unionized technicians will be participating in helping the company put together these profiles.
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. and has expressed an interest in participating in the design of Interquisa Canada s. In general.

And it is worth noting.
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. revealed unanimous agreement that the company’s training and knowledge development initiatives were the best feature of the workplace. flexible and inclusive to sustain highly effective production well into maturity. Opinions on the employee side appear to be favourable towards Interquisa Canada s. the United States.e. systems and practices it has nurtured are sufficiently open-ended. A recent employee satisfaction survey conducted by Interquisa Canada s.’s success. that Interquisa Canada s.e. the company is confident that the values. and this included not only the particular tools and processes involved. there was no inertia from already established business practices and routines that had to be overcome.c. most PTA producers use very similar processes and technology.c.e.e.’s primary objective in developing this strategy was to ensure a quick and effective start up. recognizes that it operates in a highly competitive market and that its products must go up against highly cost-effective producers in China. has had the great advantage of being able to build its knowledge management and learning strategy into the structure of the plant as it was being built. but also the overall organizational culture and work environment. The company believes that doing things differently will be the key to beating the competition in such an environment and has tried to establish itself as a learning-centred organization with that purpose in mind. and highly valued by its workers. Interquisa Canada s.c.Final Observations Interquisa Canada s.e. Moreover.c. and other countries.c. finally. However.

the CAW and the Conféderation des syndicats nationaux in Quebec. The company also helps to sustain several charitable organizations through its support for the United Way. 686 are employed in direct production. The company’s Canadian operations currently include 564 salaried employees and 1. fittings. IPEX workers are represented by four unions: the Communications. including some of its principal facilities. 25% between 1995 and 1998 and another 50% between 1998 and 2000—or a total growth rate of 160% between 1992 and 2003. IPEX embraces its role as a corporate citizen. Plastics and Allied Workers.910. IPEX has 19 plants throughout Canada and the United States. Pottery. The company has undergone significant growth over more than a decade. Sixty per cent of IPEX staff is unionized. and are used by clients in a wide number of applications. Employment Profile Employment growth at IPEX has also been quite significant. The company is the result of the 1992 merger of two Canadian plastics piping companies. municipal. 341 in indirect production. for a net growth of more than 125% over this 10-year period. auxiliary components and tools. As North America’s largest thermoplastic piping manufacturer.152 hourly wage-earners. Moulders. and 160 in distribution. The company estimates that around 30% of its workforce is in the ‘skilled’ to ‘highly skilled’ category. the Glass. and its continuous innovation has also helped it to bring to market a new composite water service pipe. Its products are sold to distributors and contractors for the plumbing. electrical. Energy & Paperworkers. The company is actively involved with government and industry regulating bodies as well as standards development and code organizations. 120 in maintenance. In 1992. valves. Scepter and Canron. Recycle and Re-use (3R) programs by using significant amounts of recycled plastic in its products. employees and their families. By 2003. It is the producer of the world’s largest diameter PVC pressure pipe and fitting. its sales increased by 40%. IPEX also shares an ongoing commitment to Recover. 18 in mould shops.IPEX
A. 230 in marketing and sales. as part of a larger community that extends well beyond customers. IPEX staff numbered 1. the company employed 839 people. Between 1992 and 1995. and industrial markets. The Company IPEX designs and manufactures a diverse line of integrated thermoplastic piping systems such as pipe. IPEX is a constant innovator of products. Of these. 161 in administration. gaskets. and invests substantially in R&D.
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. suppliers.

However.22 and absorb a considerable amount of management time in dealing with the resulting problems.
22
The company estimates that the costs associated with an individual departure amount to roughly 30% of an annual salary. providing direction and guidelines on dealing with human resource challenges at the company’s many plants. The company points out that its turnover rates vary significantly from one manufacturing plant to another.
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. improvements in the way the company recruits. the total turnover rate is higher than the industry average of 26. and communicates with employees is having an impact on retention. while its overall turnover rate has remained significantly below the industry rate of 22. In addition. and among its ‘plant floor’ employees. A new Corporate HR function was added to its administration some three years ago. but has shown consistent improvement in the past three years. As this older workforce retires. orients. Among hourly wage employees however. employee retention and further reductions in voluntary turnover are very important. each affected by the local and regional labour market and economic conditions. the company notes it has made significant strides in retaining employee retention over the last three years. The company monitors industry rates to provide a benchmark to gauge and evaluate its own turnover patterns. turnover tends to be higher among the younger segment of its workforce. which is partly a result of the demands of rotating shift work and the fact that pay rates tend to follow the industry’s average to low starting wages for employees on the plant floor. as well as providing managers with the tools and training to address these challenges. turnover is seen by the company as a critical issue to manage because it can create inconsistencies in quality output. In addition.0% between 2000 and 2003.8% in 2003. impose significant recruitment and training costs. IPEX’s “quit rate” (turnover due to resignations) fell from 7. On the whole. Just as important.1% for salaried employees. trains. IPEX does not believe it has a serious turnover problem in comparison to other manufacturing companies.8% to 4.Employee Turnover Improving The turnover situation at IPEX differs somewhat between hourly and salaried employees. particularly since more than 50 per cent of its workforce is over the age of 45. Nevertheless. IPEX will have to ensure that the necessary skills and experience are in place to carry on. Among salaried employees.0%. The “quit rate” among hourly wage employees fell from a high of almost 27% in 2000 to a low of 17. The reduced turnover rates IPEX has experienced over the past few years are in part due to the increased focus in each operation.

’ This means that if one wants to get involved in challenging projects. Joanne Rivard explains: In balancing these elements. IPEX Vice President of Human Resources. grouped around a number of key themes: recruitment. and which ones to invest the most resources in. the individual manager must determine which programs to focus on.” Based on this principle. corporate management feels that the power to ensure effective retention is appropriately vested with the managers of each IPEX plant. and a number of other programs. legislative compliance and communications. its Orientation and Training materials. as well as good safety records. training. compensation and benefits. the scorecard system gathers managers’ responses to a series of questions. challenge. This strategic orientation is part of a more general approach that seeks to preserve a significant degree of autonomy in decision-making at the plant level. IPEX’s Corporate HR department plays a very active role in supporting its managers’ efforts in the area of retention by providing coaching. and by designing a variety of tools for plant managers to apply. for each of its plants. We often get feedback from employees that our environment is one of variety. Programs and Initiatives Affecting Employee Retention Organizing for Retention We encourage promotion from within. they are there for the taking. performance management. IPEX management has a strategic approach to turnover and retention.
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. and an environment where people can learn and grow.B. orientation. training. but it does have written policies on recruitment. The “HR Scorecard” IPEX has developed a unique HR Scorecard system that allows the company to track indicators in a number of areas related to Human Resources. and counselling. Under this system. Plant managers must set their own goals and objectives in areas of productivity. Because the nature and level of turnover varies from plant to plant. We have a “Best HR-Managed Plant Award” each year to celebrate the highest level of achievement in all factors relating to retention. and it actively measures its effectiveness in these areas keeping in mind its overall concerns about retention. and low employee turnover. and ‘earned autonomy. and uses a rating scale to measure how often they carry out key HR-related functions. quality and materials management. and embeds some of its retention principles in its statement of Operational Goals. favourable employee opinion surveys. orientation. This tool was launched on the principle that “what gets measured gets managed. The company has no written HR policies that specifically deal with retention. The system allows IPEX to measure HR practices. performance management.

A recent survey. Employee Relations. drug. Compensation and Benefits Given the competitive market in which IPEX operates. The company has not been able to correlate increases in employee satisfaction with other HR indicators.Employee Opinion Surveys IPEX also expects each of its plants to conduct employee opinion surveys. to best suit the group who receive the incentive. vision and dental coverage. IPEX’s benefits plan also includes an Employee Assistance Program that is free and confidential for all of the company’s employees and their families. for example. The feedback IPEX has received from its employees indicates very positive results—4. 40% did so because of a lack of opportunities for advancement. However. through each plant payroll coordinator’s office. Incentive programs have been in place for many years for both office and plant employees. creating a slower pace of promotions in comparison to past years. The company also conducts exit surveys. based on the employee’s years of service. some unexpected positive results have been observed. such as retention. The company also offers an RRSP program by which a percentage of an employee’s earnings.5 out of a total satisfaction rating of 6—and the survey process has seen very high response rates (92% of workers filled out a survey during the last round). Despite recent large increases in premiums for medical. and the results of these studies have helped the company to understand the nature of its turnover. For example. Employees are surveyed on four key areas: Communication. IPEX has managed to avoid passing these cost increases on to their employees. The company believes that these results reflect the recent slowdown in the company’s growth due to the economic climate. and this suggests that the process itself has helped to promote a positive engagement. The company considers itself quite good at promoting its people from within. Training and Motivation. The results are shared with plant employees. indicated that of those who left. management does not feel it can offer higher than industry-average wages as a means of retaining employees. and continues to provide training and career development opportunities to employees and is looking forward to renewed growth in the upcoming years. IPEX does believe that the quality of the work environment. is contributed to a pension account and matched by the employer. dental and vision care. IPEX feels that the benefits it provides are very comprehensive and competitive. to name a few. a process that is regularly carried out on company time. short term income replacement. some plants offer a bonus program that is paid quarterly when they reach certain targets
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. the career opportunities it makes available to employees and good job security are important and attractive features in terms of retention. These programs vary in their design. extended health benefits. The group benefits package includes life insurance. IPEX finds that workers often express an interest in how well employee satisfaction at their plant compares with other plants. However.

The company does not measure direct impact such programs have on retention. Plant workers are offered extensive cross-training on a number of different machines and equipment. In recent years. Nevertheless. based on employee input. product quality. maintenance manager and then into higher managerial posts. For operations management positions. In the case of salaried workers at IPEX. and then into Supervisor positions. participation in cross-training increases the likelihood that they will be promoted to positions of greater responsibility and remuneration. and is particularly proud of the quality of its informal mentoring culture. Decisions about providing salaried or hourly workers with formal training rest with the plant managers. and is a subscriber to the idea that providing realistic job previews to potential candidates can improve the fit between the company and its new hires. the company has also concentrated its efforts in providing better orientation and training during the first few months of employment with IPEX. to plant engineer. training decisions are tied not only to performance evaluations but also career development plans provided by the company. The company also actively promotes from within its plant-floor operations positions. Employees are
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. who base their decisions on the results of performance evaluations and other factors such as internal promotions.for productivity. At the same time. Such training is closely tied to well-defined career paths that see them going from engineering trainee positions. they serve as a strong motivator Recruitment and Integration The company has recently improved and refined its recruitment process. Training. thereby reducing voluntary turnovers that result from a ‘bad fit’ between the work environment and the individual. While the company does not currently offer skill-based pay to workers who enhance their skills in such a way. but feels confident. providing cross-training allows it to develop greater flexibility within its workforce. A typical operator will be promoted through three or four operator roles. Career Development and Performance Management IPEX’s Corporate HR department does not currently set an overall policy for training and development. The bonus also takes into consideration workers’ individual attendance records. It does much more preemployment testing. This mobility is supported by continuous training. the company is actively involved in helping to develop its employees on a number of fronts. the company has designed a 2–year trainee program that takes newly hired engineers through all of the fundamental elements of processes and culture at IPEX. Employees who happen to fall short of getting a promotion are evaluated for further training and are provided with information about how further skills development will be tied to career development goals targets. and health and safety. then into technician positions.

He credits the company with providing the resources necessary to help a new. and in general. blending. in order to identify and address problems. an interview was held with Tom Harroun. The union also recognizes the value of IPEX’s cross-training program. Three of its plants have achieved three years of operation without a single lost time accident. to a loss-time accident rate of less than one per cent. in particular. and so are given the chance to diversify their competencies as well. The company also acknowledges that the Communications. when the plant had a lost time accident rate five times higher than its current level. a 14-year employee and current union representative at IPEX’s Edmonton plant. Health and Safety IPEX strongly believes that the strides it has taken in the area of health and safety have had a significant impact on its ability to retain people. short term disability claims have also gone down by some 20% over the last two years. The company has made considerable investments over the years in ensuring that its employees work in a safe environment. and equipment operating).
C. semi-skilled recruit to develop his or her competencies in a number of areas (the representative mentioned. Employee / Union Perspective IPEX actively encourages its plant managers to talk daily with union local representatives. While the Edmonton plant has only had a union for the last couple of years. in which employees can feel at ease in approaching plant managers to address their concerns. To gain an employee and union perspective on the issue of employee retention. Harroun feels that relations between employees and the company have been improving significantly. Unionized workers at the plant have been particularly happy with two new plant managers who they credit with addressing employee concerns effectively and dealing with problems expediently. Similarly. which allows employees to move into different areas of production and develop a broader range of skills.
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. These represent dramatic improvements compared to only five years ago.. health and safety. moulding). IPEX’s training programs are strongly valued by employees of the company. WHMIS. Energy and Paperworkers (CEP) union—which represents IPEX workers in several plants—has in past instances played an important role in re-establishing a good labourmanagement dialogue when relations became more challenging. it reduced lost time accidents by 40% from the previous year.g. Joint monthly union-management meetings are effective in addressing issues and problems when they surface. Training Programs Valued According to union representative Harroun. the union feels that the plant’s management has helped to foster an environment of openness.also provided with the opportunity to move into different departments (e. In 2003.

its representative gives part of the credit for good labour-management relations to the leadership shown by the plant’s management. particularly in the area of benefits.
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.IPEX’s CEP local is still on its first four-and-a-half year contract. Nevertheless. and the union local will be seeking certain improvements in the next round of negotiations.

drawing selectively from the ranks of the contract group. employees and shareholders through superior service and quality in the production of PET bottles and preforms”. Westbridge adds to the core group. The company’s mission is “to provide the best possible value to our customers.
Employment Profile Westbridge has 55 full-time non-unionized employees. Westbridge is well positioned to serve the market. In management’s view.
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. trades. Out of Westbridge’s 55 core employees.000 sq ft facility is comprised of approximately half production and half warehousing and is on a 24 hr 7 day schedule.Westbridge PET Containers
A. About 55 per cent of its sales are to the US market. beverage. about 40 are plant workers. As the business expands. This “core group” of employees is supplemented with a “contract group”. The 80. this recruitment practice also serves to motivate contract workers to perform well during their contract term. and the remainder to Canada. Workplace demographics are more of an issue for senior management. The Calgary facility has been in operation for over 10 years utilizing Husky injection moulders. The company is not expecting a lot of retirements among plant workers in the coming years. and personal care markets throughout North America. The pool of contract workers is also a primary source for employee recruitment. This experience has led to several innovations to products and processes for a variety of markets. With in-house engineering expertise on preform and bottle design. This combination of core and contract employees has worked well for Westbridge. knowing that the best employees will be selected to become part of the core or permanent workgroup. with about 25% of this group considered skilled workers ― persons with formal education or training (university. Low cost customized moulds that can be machined in 4-5 weeks puts Westbridge in a good position for "fast to market" projects for the full range of bottle shapes. plastics course). brought in between April and late summer to take advantage of seasonal business opportunities. Westbridge management has over 60 years of combined industry experience and knowledge. and the company recognizes the need to start looking over the next 5-10 years as to how to bring supervisors and senior operators into management role. mainly in the beverage bottles market. and Cincinnati stretch blow moulders. The Company Westbridge Containers is a privately owned company specializing in custom PET preforms and bottles for food. allowing them to offer the core group relatively good job security while taking advantage of seasonal opportunities through the contract workers. as most are aged 25-40.

There are certain limitations
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. and will provide a pay premium when employees become qualified in that job (an extra 50 cents or dollar per hour. They encourage employees to train in other jobs. Westbridge employees may be somewhat limited in terms of where they might go. With only two competitors in the area. Westbridge also provides more informal and an adhoc bonus to employees when business is particularly good. and an RRSP plan in which the company will match contributions of employees up to 3 per cent of annual salary. it is not because they’re dissatisfied with working conditions. Management also has the sense that when employees do leave. Employee benefits include Health and Dental Plans. Examples include clothing. it engages in a number of practices that it considers essential to employee retention. Indeed. Programs and Initiatives Affecting Employee Retention Compensation and Benefits Westbridge offers what it considers to be a very competitive pay and benefits package. Safety Shoe Policy. and with equipment and production processes that are very specialized. a typical year at Westbridge will see only about two employees leave . Westbridge also has an innovative Bonus plan. Workers can learn as many positions in the plant as there are. Eye Policy. Management recognizes that one of the factors producing this low turnover is the favourable competitive environment in which they are located. We want to make sure we keep the people we have”
Nevertheless. “To find qualified.Turnover very low Management describes its turnover as “very low”. “very close” to that of larger firms in the same business. And while Westbridge does not have a formalized corporate retention strategy. The company also provides an Employee Assistance Program. plant performance (gain sharing: efficiencies in scrap. lunches or social events. which is composed of profit sharing. for example). Management is keenly aware of the importance of employee retention. Employees cross-trained in this fashion will go back to their regular job. especially those seasoned core employees and operators who are critical to ensuring production runs smoothly in summer peak employment periods. skilled people with experience in the industry is difficult. Westbridge does not take these favourable conditions for granted. but receive the extra pay no matter where they work. Pay-for-Knowledge Westbridge has also introduced an innovative pay for knowledge system.this translates into a turnover rate of under four per cent. downtimes and customer complaints) and individual performance (pay for performance based on overtime and attendance).
B.

quality. in which employees are free to talk directly with managers at all levels. with employees self-motivated to increase skill levels. Westbridge is not concerned about making training investments only to see employees leave. In their view. The pay-for-knowledge system provides Westbridge with at least three key advantages. they will leave anyway. and be confident and comfortable working with equipment and machines. Management cites the example of female plant employees. the training opportunities and knowledge-based compensation system at Westbridge have resulted in the powerful combination of internal skills development and low employee turnover. according to Westbridge’s HR Manager. a variety of "soft" skills and health and safety. In their view. computers. Third. and will also pay for employees who want to take courses relevant to the business. Communications activities take several forms at Westbridge:
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.to the system however. employees who receive a pay premium for their knowledge are less likely to move to other competing companies with more traditional job-based pay systems. Communications and Employee Recognition Westbridge feels that an essential factor in employee retention is open and effective communications. Examples include welding or electronics courses. First the enhanced flexibility of its core cross-trained workforce means that Westbridge can effectively manage the demands of seasonal business peaks when less experienced contract group is brought in. Training Opportunities Westbridge believes that training makes a fundamental contribution to employee retention. if there are no opportunities. A recent employee survey showed Westbridge plant workers to be unanimous in their satisfaction with the pay-for-knowledge system (out of 40 plant employees. The company prides itself on its “open door” communication policy. if there is a complaint among employees. Westbridge has introduced the pay for knowledge compensation system described above. as Westbridge cannot simultaneously train large numbers of employees in other operations at the same time. They reason that workers want to be equipped to do their jobs well. it is that there are not enough opportunities available for people to train in the areas that they want to go. This knowledge based compensation system has been well received by employees. it has increased morale. who used to pack bottles into boxes and have now become senior operators. 35 were “extremely satisfied” and 5 were “very satisfied”). In fact. For these reasons. or full fledged-apprenticeship training. On the contrary. and employees are not happy in their jobs. produce quality products. Second. Westbridge employees are continuously trained in equipment operation. workers not adequately trained will simply not be happy with their jobs.

Westbridge encourages employees to participate not only for their input but also so employees will take back information and share it with coworkers verbally.
Integrating Recent Immigrants Westbridge has quite a few employees who are recent immigrants to Canada. and is expected to become even more important as new and more complex machinery is introduced in the plant. Monthly safety committee meetings. the Employee Assistance Program. About 25% of its plant workers came to Canada within the last 10 years. The surveys provide Westbridge with valuable input on areas that might be improved. Employees must be at work. new products. there are a lot of industry specific technical terms that must be learned.• • • • • • •
•
Production meetings at the start of every shift to inform people what has happened before and what’s going to happen after. Bulletin Boards with information about safety. in which good (or bad) encounters with employees must be documented. Supervisors must fill out month-end reports. For this reason. but are free to spend time in different departments and activities. business performance. The program is designed for people who might want to learn or be exposed to things that they might not normally get a chance to. A recent employee survey showed high levels of overall satisfaction with the company. This allows upper management to communicate with employees about good performance. Westbridge often uses a job-pairing system in which a new employee works closely with someone of the same cultural background. and other information of interest to employees. While these employees all have at least a basic level of understanding of English. Westbridge sees this as a way to recognize employees. but room for improvement on communications. Employee surveys are used to gauge satisfaction with the company as a whole and with more specific issues such as compensation and communications. Westbridge’s
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. A Culture of Respect Westbridge management views its employees as the most important part of the company. The survey results showed that written communications are not always understood. Retaining employees and their skills is seen as vital to the company’s growth strategy. particularly in relation to workers whose first language is not English. To this end. Every two weeks senior management has communications meetings to discuss wide range of business issues including major activities. Shift supervisors have $200 per month discretionary allowance to buy food or take employees out. from countries such as Vietnam and India. and important for team building and communications. and should be communicated verbally as well. The results are posted after every meeting for workers to read. etc. Westbridge is attempting to increase its verbal communications. Employees are entitled to a “do as you want day” on their birthdays. changes to benefit plans. While fully aware of the “business case” for employee retention.

• A pay-for-knowledge system which gives employees incentive and motivation to learn more. but it was not seen as the only reason for Westbridge’s low turnover and high level of employee commitment: “there are many things that make Westbridge a good place to work. a fair level of pay is an obvious factor affecting retention. • Training opportunities. and comfortable approaching management. • “All around. “a chance to succeed and step up”. not only in terms of the business. From this employee’s perspective. • Recognition for good work. not just the pay element”. Training was seen to boost morale. “we try to let them know that every employee here is important. and had just completed his third year at Westbridge. For this employee. low turnover at Westbridge had a lot to do with the ownership and management team: “we get a lot of respect from them”. an interview was held with a senior operator and lead hand at Westbridge. build respect between employees and contribute to a strong work team. • Good job security. • Company social functions outside of work such as summer and Christmas parties open to families and children. which allow personnel to help out and provide support to other employees and departments.approach is grounded in a more basic philosophy of treating people with respect. Employee Perspective To gain an employee perspective on employee retention. including on-going cross-training. A college graduate with a strong technical background. Several reasons for successful employee retention were given: Open door communications policies which make employees feel comfortable in their jobs. but on a personal level as well. According to Westbridge’s Human Resource manager. •
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. a good place to work”. this employee was a member of the health and safety committee.”
C.

etc. In carrying out this research. In many of the case study examples presented in this report. We would like to draw on this research to offer a set of conclusions and recommendations in two areas. The Methodology and Application of Best Practice Research in the Plastics Sector. Even a request for 45 minutes of their time to conduct a telephone interview proved to be a demand they could not possibly accommodate..e. the CLBC discovered a number of methodological issues concerning application and use of best practice research. and the specific workplace-acquired skills and knowledge people walk away with can take years to replace. low employee turnover and employee commitment. The ongoing reporting of best practice research would likely increase visibility and utility of the CPSC to plastics firms and their employees. the logistics of scheduling interviews proved challenging within the relatively short duration of this study. we provide some observations on our experiences carrying out this Best Practice research. Conclusions and Recommendations 1. contact and interview senior managers within the Plastics Sector were high. product and service quality. For this reason. turnover was virtually absent. We discovered that the time and effort to identify. it loses skills. Even though we relied on an extensive network of contacts and referrals. First. it is obvious to us that the contacts with whom we needed to speak at various plastics companies were already under daunting work schedules. This study has highlighted examples of Best Practices in Employee Retention using both the human resource literature and actual case study examples of Canadian plastics firms. we present some conclusions from the case study research and recommendations about the kinds of strategies companies might consider that they might improve retention. it is our view that best practice research should be carried out as an on-going objective and activity of the Canadian Plastics Sector Council. The cost of replacing workers can be high. It is therefore within this broader notion of skills management that employee retention assumes such great importance. Second. affecting productivity.’—i.
A. however. the problems associated with finding and training new employees can be considerable. or well below the
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.VIII. Conclusions and Recommendations: Managing Skills
Employee retention is really an element of a more general concern that might be best termed ‘skills management. As an on-going activity. profitability and a host of other key concerns. We also learned that many of the firms we contacted were unfamiliar with the Plastics Sector Council. everything that has to do with recruiting. The magnitude and nature of that skills loss is an important management issue. When a business loses employees. These methodological considerations may be useful for sector councils and their funders. Beyond this. maintaining and developing the necessary mix and levels of skill required to achieve organizational and business objectives. researchers would be able to offer businesses considerable time flexibility for the arrangement of interviews / site visits. B. Our research found many good examples of successful Plastics firms with high levels of retention.

Outside of these fundamentals. Firms should understand the nature and magnitude of their turnover. These fundamentals may seem like “soft” approaches to employee retention. 6. how it affects the skill requirements needed to achieve business objectives and performance targets. While there is no guaranteed set of practices that will work in all firms. 7. and programs that were appropriate to their own unique environment and circumstances (i. 5. and it provides new skills that are intrinsically rewarding. product sector. there are “best practices” identified within the HR literature. All of the companies we interviewed were very active in the area of skills training and professional development. why it is happening. industry segment. Firms looking to improve their retention or improve their skills management more generally might consider the applicability of these strategies and initiatives to their own unique circumstances. All of the low-turnover firms we examined felt it important to be competitive on wages. In the cases we studied. it is an important starting point. Some of the companies profiled in this report have done very well by pegging compensation levels against ‘middle of the road’ wage benchmarks rather than trying to out-pay their competitors. benefits. low turnover was not necessarily the result of a formalized “retention strategy. and so on. 2. skill composition of the workforce. The firms we examined all had a strategic understanding of their workforce skill requirements.e. and so on). 3. While not necessarily the only factor in retention. All stressed the importance of responsive and open communications and the importance of understanding the needs and interests of employees. practices. which have evolved over time into effective strategies. All worked from the principle of treating people fairly. our case studies revealed considerable variation in the approaches and initiatives taken by different firms. recognition and rewards. firm size. and of the role and importance of skills in meeting business objectives. Many of the companies profiled in this report have developed their own innovative approaches internally. workforce characteristics and interests. 4. This is not to say that there are no common principles or fundamentals upon which good retention practices are built. Such strategies can also be modified to reflect individual company circumstances. and communications all varied by firm size.industry averages. many of the firms were using their own knowledge and creativity to develop innovative methods. Approaches to compensation levels and systems. Combined with some communication about how an
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.” Nor was there a “cookie cutter” approach to employee retention. Training appears to be an effective retention factor because it is a visible investment that the company makes in the worker. Instead. but they were repeatedly cited in our interviews as the most important factors affecting employee commitment. training and career development. and highly effective examples as described in our profiles of Plastics sector firms. Our case studies also suggest that SMEs can be just as successful as large companies at keeping their workers.

employability and job challenges and. A number of companies make considerable efforts to communicate with employees for purposes beyond what is immediately necessary for them to do their jobs. personal and professional development opportunities. etc.
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. Our case studies suggest that many companies — particularly small companies — have little or no formal communications practices. Generally. their employees. as a retention measure. Cross training appears to be a widely-used practice among the Canadian plastics firms we examined. cross-training enhances skill levels. but are nevertheless extremely effective in speaking with. should all should reflect the interests and needs of one’s employees. and listening to. Many felt that such strategic re-orientation was one way to remain successful in the context of lower-cost competition.employee’s efforts at developing skills will lead him or her to more challenging and meaningful positions within the company. A final note on retention. The design or use of various compensation systems. it can be a useful tool in building employee commitment. can be effective in offsetting the negative impacts of knowledge loss resulting from the departure of workers. training encourages workers to make longer term commitments to their workplace: it permits them to see a future with the company. and to seize new growth opportunities. Finally. their decision to stay with the company depends vitally on how well they fit in to the company’s way of doing business. how it treats employees. including strategies to retain employees and transfer knowledge. Our own observations of Canadian plastics companies suggest that recognition and rewards are strongly tied to the ‘culture’ of a particular workplace — they support that culture. when employee turnover is high. and how people relate to one another in the workplace. and other incentives are important in attracting people and keeping them happy. 10. the strategic re-orientation to higher value add products and services also means new and higher workforce skill requirements. it appears two serve two valuable functions: (a) it creates flexibility within the workforce which. A number of our case studies suggest that while compensation. the development and management of these skill requirements. training is enthusiastically embraced by employers because it is in any event fundamental to the ongoing survival of manufacturing companies working in an increasingly competitive and innovation-driven market. and they are consistent with that culture — whether or not that culture is something consciously managed or iterated by the company. what it expects of them. 8. 9. skills development and international competition It is clear from our consultations with Plastics Sector stakeholders that one of the outstanding issues facing the industry is competition with lower cost producing countries. For individuals firms. is an essential part of this strategic re-orientation. rewards and recognitions. and with respect to this particular report. 11. (ii) as with other types of training. type of benefits offered. Many of the firms we examined were actively seeking to move their businesses into higher value-add and niche markets in the face of emerging international production patterns. as such.

What exactly constitutes a retention/knowledge transfer best practice? In other words. skill-based pay. Singapore Ministry of Employment.
Conceptual Framework for the Selection of Best Practices
There are three central dimensions of the best practices selection framework that will require attention: (1) What process should be used to identify best practices in retention and knowledge transfer? (2) What information needs to be collected once a best practice is identified. in order to describe and document its outcomes? and. Recognition and Rewards 4. Training. Professional Development. Government of Alberta. Compensation & Benefits levels 2. What to look for? i) Employee Retention A review of the literature indicates a wide and diverse range of potential retention strategies.
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. is there a sound process that can be designed that would allow an observer to pass a judgment on the admissibility of a particular initiative or workplace for the purpose of the CPSC project? B. Career Planning 5. 2003. 2000. analyzed.) 3. and reported on?
1) Process of identifying best practices In defining a process for identifying best practices. Orientation & Integration
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See. 2000. for example: Gunderson 2002. On the basis of the secondary sources consulted.Appendix A. CCHREI. two key questions were considered: A. etc. In the event that a ‘system’ or criteria for selecting best practices could be defined. what steps would be required in order to arrive at possible best practice identification? What sources of expertise would need to be tapped into in order to accomplish that?
A. pay for performance. (3) How will the information be organized. Compensation & Benefits systems (eg. retention practices can be grouped under the following categories: 23 1.

etc. and the prescriptive side of the literature on retention and effective HR practices clearly recommends approaches to HR planning that integrate a number of these tools within a broader strategic plan.).
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.e. Performance Management & Feedback 14. Gunderson. use of employee participatory programs. 2002). nor are they always sufficient — in themselves — for ensuring retention and worker satisfaction. and managers’ accountability for their retention or attrition rates. Healthy Workplace or Well-being Programs 7. Strong leadership. 1990) they are not necessarily the only option for maximizing HR outcomes. Diversity Management 12. Manager Training & Accountability 10. use of cross-training or cross-utilization. Others The diversity of interventions captured in the above list appears to confirm a growing consensus that while total compensation levels are an important factor influencing retention (Lawler. Flexible Work Time 11. for example. and the ongoing measurement of the impact of particular interventions are broader strategic elements of an establishment’s overall management that may be essential to the effective implementation of retention strategies including practices selected from the list above (MIT. The approach of integrating a wide range of HR practices under one retention strategy is perhaps best summarized by Ware (2001).6. compensation and benefits. managers’ behavior with employees. 1997. a clear articulation of organizational values. Job Design & Work Teams 8. Gunderson (2002). Work-life Balance 13.” Attention to the presence of an overall strategy for retention (or to an overall HR strategy that might include retention among its objectives) is clearly an important consideration. while Anderson (1994) uncovers very strong correlations between employee retention and productivity in high commitment HR systems. who argues that “successful employee retention requires companies to take a multifactored [sic] approach that includes effective organizational systems (i. Employee Participation & Communication 9. use of skill-based pay. There is. In addition. little evidence to suggest that the selective use of these tools as stand-alone policies generates a significant positive impact on retention.
24
High involvement work practices involve practices such as use of internal promotions. broader organizational commitments are cited as essential to ‘high performance’ HR management.24 These conclusions are supported as well by Leckie and Betcherman’s report on a survey of 700 Canadian establishments which found that firms with participation-based (rather than compensation-based) HR management systems are more likely to experience lower quit rates. use of performance (versus seniority) based promotions. in addition. etc. notes that non-wage forms of compensation can yield positive organizational outcomes.

In light of the above. Likewise. and other manufacturers in the firm’s region (local labour market)? Has the firm conducted employee satisfaction surveys that have indicated improvements in employee attitudes or organizational commitment since the implementation of its HR strategy. CLBC contends that best practices will be identified using one or more of the following criteria: 1. Firms that have an explicit retention strategy. or a significant positive trend in those indicators over a relatively short period of time.
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. and evidence of commitment to retention programs on the part of senior management. plan or program? How good is the firm’s retention of workers as compared to direct and comparable competitors from within the sector. among other organizational goals. an organization that has relatively high turnover rates but that has significantly improved on this situation in a relatively short period of time should be included. the presence of other organizational and human resource practices that are known to contribute to retention (incentive pay systems. etc. subjective indicators of performance will be used. the CLBC research team will cast the net widely in terms of what might constitute a retention best practice. alternative work practices. based on the firm’s selfreported answers to the following questions: • • • How does the firm rate its retention of workers since the implementation of its HR strategy. an organization may well have a retention strategy in place.) The absence of an explicitly articulated retention strategy does not necessarily signify the absence of an explicitly articulated HR management strategy that may be effective in achieving good retention. demonstrations that the organization’s strategic direction is linked to employee retention. (2) the strategy is too new for a reasonable measurement period to have elapsed. but this strategy may not lead to improved retention because (1) the strategy is ill-conceived or poorly implemented. In instances where quantitative measures of retention/turnover are either unavailable or in doubt. Indeed. The important practical question is what criteria will be used to select firms with retention best practices. This selection criterion will look for the presence of written policies and programs specifically directed at employee retention. central to its overall business strategy and human resources planning. Firms with low turnover or high retention (compared to industry or occupation benchmarks). For example. or (3) forces beyond the establishment’s control are strongly driving turnover. Best practice firms are unlikely to be selected on the basis of only one criterion. 3. a firm may well exhibit low retention. In organizations that lack an explicit retention or HR management strategy. plan or program?
2. but this outcome might be accidental or related to favorable conditions or circumstances that are beyond management control.

or a marked improvement in these indicators over a relatively short period of time. which would include training and any forms of personalized learning activities. the typology of initiatives to promote and support effective knowledge transfer that is outlined in CLBC’s proposal provides a very good starting point for delineating possible best practices:
25
As opposed to. Nevertheless. and recognizing as well that a number of methodological issues can complicate even those that appear to be ideal. Examples of these might include: • • • The presence of only subjective indicators of good retention. skills and knowledge among employees within an organization.
ii) Knowledge transfer As a first step in defining what constitutes a knowledge transfer best practice. Establishments conforming to this definition would be considered as ideal cases. but not an explicit retention strategy. that it may be difficult to find such cases. relatively low turnover or high job tenure rates compared to an industry or occupation standard. The presence of objective and/or subjective retention indicators. The presence of an explicit HR management strategy or other practices known to affect retention. systems. one that centres around the exchange of knowledge among and between employees25 with the purpose of ensuring that an organization’s collective memory. skills set or body of knowledge is enhanced. according to both subjective and objective indicators. share or transfer information.
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. Knowledge transfer strategies could thus conceivably be defined. for the purpose of this project.Recognizing the many methodological issues raised above. and not diminished with employee attrition. Recognizing. In light of this. as defined here or linking knowledge transfer strategies or programs with positive organizational performance or outcomes. it can be argued that there is not a large body of research describing specific knowledge transfer practices. we may define a retention best practice as follows: An establishment that has an explicit employee retention strategy in place and that exhibits. In the context of this project. or between separate entities of a multi-location organization. the selection criteria can be progressively broadened by admitting less decisive cases. for instance. it is preferable to adopt a narrow definition. If the available literature is any indication. it is essential to clearly define what is meant exactly by knowledge transfer. it is clear that a certain degree of flexibility will be required in the application of the three selection criteria described above so as not to set a standard that screens out too many potentially important cases. but uncertainties about their correlation with implemented practices. programs. as the concerted actions. however. transfer of knowledge on an individual basis. or initiatives designed to retain.

Approaches designed to support the sharing of knowledge. expert opinions and perceptual information from key stakeholders will take on added significance. This definition is attractive because it does not place an unrealistic burden of proof on the research team to demonstrate quantifiable impacts of knowledge transfer approaches and initiatives. Activities and methods for inter-generational sharing knowledge and skills. a knowledge transfer best practice can be ascribed to an organization that has put in place one or more of the above-mentioned approaches.
3. In this context. namely phased-in retirement. skills. and information: • • • • • • • Clearly articulated business strategy valuing the creation. Groupware. Sharing best practices from other businesses Sharing lessons learned Documentation of knowledge assets.g. e-learning) Job rotation and cross-training
2. and for the purpose of this project. Recognition of knowledge-sharing practices or role models Mentoring. in the absence of such demonstration.1. it may well be more difficult to objectively identify knowledge transfer best practices. Given the lack of a solid conceptual framework – or empirical evidence – of the causal links between knowledge transfer activity and organizational performance. sharing and retention of knowledge Formally articulated organizational positions on openness. coaching and peer training Communities of practices and knowledge networks integrated into the work flow. Succession planning approaches: • • • Early identification of potential successors Focused learning and development assignments for successors Job shadowing
On the basis of this. Preference should be given also to those organizations that have been able to demonstrate positive organizational outcomes/performance or. and those who possess them. communication. Use of technology (e. etc. including on-site workshops. Approaches designed to retain knowledge and expertise: • • • • • Activities to identify key expertise and knowledge to be captured and retained.
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.. post-retirement programs. internet/intranet. have put in place a system for measuring such outcome or performance. etc. database.

Geography. iii. On the other hand. the degree of automation. Firms that produce highly specialized or ‘niche’ products may be relatively more insulated from competitive pressures that might sharply drive down prices and. In the latter case. These may influence the type of skills required of employees and the types of training. the types of occupations represented in any given firm can all vary depending on what type of producer is in question. Producers in rural areas or in other regions of the country may operate within small and relatively isolated labour markets. The plastics sector is made up of different types of companies— resin suppliers. demand and skills profile of local labour markets.) face strong competitive pressures that often oblige them to control production costs aggressively. Differences in location may signal important differences in the supply. CLBC clearly heard from a number of respondents that domestic and global competitive pressures can vary depending on the market or product segment in which companies operate. these conditions may stimulate different knowledge transfer and retention needs. Five distinguishing traits are particularly noteworthy: i.g.g. ii. etc. E. GTA) may. thus. to varying degrees. local labour markets and economic conditions may have a significant impact on the forces driving turnover.iii) Additional Identification and Selection Criteria Interviews with key CPSC informants uncovered a wealth of information about the diversity of companies that are represented in the Canadian plastics sector. or they may be more likely to identify the more highly skilled segment of their workforce as the primary target of retention initiatives.. on the one hand. development and R&D investments the firm must make. The mix of skills requirements. plastic bags. Thus.
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.g. machinery and mould makers. the type of best practices information that would be relevant to CPSC’s target audience. Technology. wire coatings. Producers located in areas with large concentrations of manufacturing (e. non-financial retention or incentives may be particularly relevant in helping them to avoid unwanted turnover. Rapidly modernizing firms may be particularly interested in knowledge transfer best practices if they are making substantial investments in training. but may also find it more difficult to keep them from jumping to other competitors or other industries. costs. there are significant differences in the extent to which plastics establishments have introduced automation and new technology into their processes. Market segment. custom and proprietary). processors of different types (captive. One informant noted that plastics producers in Atlantic Canada encounter less problems in finding workers for short-term contracts given the proportionally larger seasonal labour force. Whether or not they work in specialized or commodity segments.. producers in the commodity segments (e. find a large pool of labour from which to draw. etc.. In turn. Plastics companies differ in a number of key characteristics that may influence. iv. Industry segment.

/Hewitt’s 50 Best Companies to Work for in Canada.
B. research conducted to date suggests that the types of best practice strategies sought may be disproportionately concentrated in very large.
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. While by no means conclusive. in identifying specific Canadian manufacturing firms. high-tech or highly specialized firms. we therefore propose an additional principle for selecting best practices. These lists contain sufficient detail to compile an initial selection of manufacturing companies that will be checked further against recommendations and feedback received through the stakeholder consultations. technology. particularly within the Plastics sector. market segment. geography and size of establishment. and indeed. e. Size of workforce. It is worth noting that differences in these traits do not necessarily reflect inherent differences in performance. they may however.B. as well as the capacity to implement these. Literature Review The literature review has provided vital information to the project about the diversity and range of organizational practices relevant to employee retention and knowledge transfer. CLBC has been able to compile a number of sources of the “best companies to work for” variety. Nevertheless. R. the project team will endeavour to select best practices—once these have met the criteria specific to retention and knowledge transfer—in such a way that the resulting compendium is reflective of differences among firms with respect to the five additional identifying criteria: industry segment. however. research conducted to date suggests that size of establishment signals clear differences in the types of retention and knowledge transfer strategies that may be relevant.O. CPSC identifies SMEs as an important target audience for the best practices project. market context. Is the experience of these establishments sufficient for the needs of the current project? and. and information needs of all of CPSC’s audiences? In an effort to ensure that the best practices information resulting from this project is reflective and responsive to the diversity of the plastics industry.g. that SMEs without fully staffed HR departments may not have in place highly developed retention strategies. does it address the distinctive capacities. It is clear. It is possible. and (2) consultations with key stakeholders (25-30 persons). To the greatest extent possible. adopt a number of workplace practices that are engender good retention.v. for example.. The literature review has been less successful. that have been cited as having exemplary or innovative practices in the areas of retention and knowledge transfer. 1. that these traits do reflect marked differences in the way that establishments operate within the plastics sector. In its original RFP. however. How to select best practices? Two main research tasks were initially identified as contributing to the identification of Canadian manufacturing firms with best practices in the areas of employee retention and knowledge transfer: (1) a literature review.

3. Some 30 companies have been identified through these interviews.2.. proved to be a very useful source of initial information on potential best practices companies within the Canadian plastics sector. investigation of the ‘best companies to work for’ establishments. interviews with CPSC board members conducted early in the project. Consultations will be conducted with a number of individuals or representatives of organizations. and will be verified as much as possible against information obtained through the stakeholder consultations. and the project researchers will carry out follow–ups as necessary. a further selection from this list will be made if it is found to contain too many potential candidates. Canadian Plastics. and initial leads provided by CPSC members will provide sufficient material to draw up a definitive list of best practice establishments. HR or Business Consultants with an expertise in either HR management or the Canadian plastics and manufacturing industries. they will at this point concentrate heavily on the identification of potential best practices establishments within the plastics and manufacturing sectors. Academic or professional researchers. CPSC Member Interviews In addition to yielding important information about the plastics sector and the key challenges it currently faces. If necessary. Plastics in Canada) Management. Key Stakeholder Consultations Consultations with key manufacturing and plastics stakeholders will be carried out using a structured interview guide containing mostly open-ended questions. Owners or representatives of businesses with key insight into the issues to be addressed (if relevant and necessary)
While the consultations will continue to look for useful information on specific retention/turnover/knowledge transfer issues on a sector. such as: • • • • • • • • Sector Councils that represent segments of the manufacturing industry Industry and Business associations. Representatives of various HR professional bodies Publishers of industry-specific periodicals (e.g. A total of 15–20 brief interviews will be conducted with persons drawn from the above-mentioned groups. In the case of retention best practices. the project researchers will trim the list using the criteria described in the previous section of this
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.or occupation-specific basis. and will serve as the basis for some initial investigations into best practices in the plastics sector. Industrial Labour Unions. Stakeholder consultations.

training-related. etc.) iii) Occupational-level outcomes (same as ii) but with an occupation-specific focus)
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. 2) What information to collect Once a list of potential best practices is assembled. B. characteristics of the best practice.). programs or strategies designed to increase retention. in the case of both retention and knowledge transfer best practices candidates: 1. reduce turnover. health and safety record. organizational. multi-site. overall business strategy. nature of the work/ production process. or some of its individual components. etc. skills and knowledge development. etc. Give more weight to cases that have a longer track record. more investigation will be directed at documenting them. 2. program or initiative (occupational groups involved. Give more weight to cases that have a wide spectrum of specific activities associated with the strategy or approach.report.). and union representatives will be utilized for this purpose. and/or improve knowledge transfer. Rationale. ii) the rationale and motivation behind the initiatives. Outcomes: i) Firm-level outcomes and performance indicators (turnover rate. Three additional criteria will be used. Give more weight to cases where systematic attempts have been made to measure the outcomes of the strategy or approach. program or initiative put in place (financial.) iii) the scope and magnitude of the strategy. sector). costs and resource levels C. impetus: i) the context within which the best practice takes place: industry context. etc. and outcomes will be collected. job satisfaction. Interviews with firm managers/owners. profitability. HR and other management practices. Characteristics of the best practice: i) formal/informal character of the best practice ii) the type of strategy. HR managers. and 3. Information on rationale. as per the following: A. if necessary. firm level characteristics (size.) ii) Employee-level outcomes (job tenure. productivity. etc.